Ep. 121: Putting People First with Herb Sargent of Sargent Corporation

Herb Sargent, Sargent CorporationHerb R. Sargent is the president and CEO of Sargent Corporation, an infrastructure construction firm based in Stillwater, Maine. 

Founded by his grandfather Herb E. Sargent in 1926 with a used dump truck and a strong work ethic as his assets, the company now has hundreds of employees owners working in New England and the mid-Atlantic regions.

Herb and host Missy Scherber dig into workforce development, the advantages of employee stock ownership plans and the importance of investing in the well-being and prosperity of your people.

They also discuss:

  • Buying back the family business
  • Being intentional about training your workforce and creating career paths
  • Hiring managers that allow you to focus on the bigger picture
  • Leading through difficult situations

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Show Transcript:

Intro:

Welcome to CONEXPO-CON/AGG Radio, where we bring you boots on the ground perspectives from construction business owners and industry experts about their successes, challenges, and whatever else is on their minds. Consider them your own personal mentors on technology implementation, equipment solutions, business management, and more, enabling you to apply their expertise to your business.

Held every three years in Las Vegas, CONEXPO-CON/AGG is North America's largest construction trade show. For even more ways to connect with the industry, visit conexpoconagg.com/connect. We've got another great guest on the show today, so let's dig in.

Missy Scherber:

Thank you for joining us for another episode of contractor conversations on CONEXPO-CON/AGG Radio. I'm your host, Missy Scherber. And friends, I'm so excited to introduce you today to Herb Sargent, the President and CEO of Sargent Corporation, an infrastructure construction firm based in Stillwater, Maine. Founded by his grandfather, Herb E. Sargent in 1926, with a huge dump truck and a strong work ethic as his asset.

Missy Scherber:

The company now has hundreds of employee owners working in New England and the Mid-Atlantic regions. Today, we'll be discussing workforce development, the advantages of employee stock ownership plans, and the importance of investing in the wellbeing and prosperity of your people. Well, Herb, thank you so much for joining us today. We're very, very excited to have you on the podcast.

Herb Sargent:

Thank you, Missy.

Missy Scherber:

Yeah. So, for those who don't know you, and your almost 100-year... company's 100-year history in the industry, why don't you tell us a little bit about your family's history in the industry, and how that led to your role as President and CEO of Sargent Corporation today?

Herb Sargent:

Well, it's hard to squeeze 100 years into a minute, but I'll do my best. We had Aaron Witt do it in three-and-a-half minutes. So, my grandfather started the company in 1926 as a 20-year-old. And it was some of the same old story that you hear of young guy buys a dump truck, and starts from there. He began to take state highway contracts in the '30s, and went on to build a lot of airports in Maine, and interstate in Maine eventually.

Herb Sargent:

And in the '70s, my dad took over, my dad and my uncle took the company over. And then, in the late 1980s, the company was sold to a company from Paris, France, contractor from Paris, France. I stayed on for about three years after that. And then, I left and started my own business with my brother, which was called Sargent and Sargent.

Herb Sargent:

And then, about 12 years later, a number of different ownership transitions had taken place with my grandfather's company. And the now owners of the company wanted to divest a bit. So, we had an opportunity to buy it back in 2005. And we did, and my grandfather at that time was 99 years old.

Missy Scherber:

Wow, wow. That's quite a history there. And later on the show, we will talk about that transition. Because one of the things we'd like to do on this podcast is go behind the filtered photos, and talk about some of the ups and downs of being in business. And I know that transition was some ups and downs for you. So, we'll talk about that a little later on. But once you've reacquired the company in 2005, what's been the primary focus of Sargent Corporation in the last 15 years?

Herb Sargent:

Well, the first five was survival. Because my company Sargent and Sargent was about 20% the size of the company we bought. So, we had to leverage up financially pretty steep to make that happen. So, we had to we really had to focus on survival, and cash flow, and profit, and getting work, and that sort of thing. And then, the Great Recession came, and it was more survival, but in a different way.

Herb Sargent:

We had gotten to the point where we weren't so leveraged financially, so we had some wiggle room. And then, it's three phases in the last five years, it's really been about developing people, developing the workforce. Because in the middle of five years, we were like a football team that stayed away from the draft. We just didn't draft a lot of players. And that began to show up for us in, let's say, 2015, '16, it really inhibited our growth.

Missy Scherber:

Wow. So, you actually have had that experience of workforce development. And you felt the chest pain of, "Well, we haven't been tracking more players and we can't grow without that." That is so interesting, and I'm excited to talk more about your experience there. Tell me quick though, because my business owner ears perk up when you talk about the survival years.

Missy Scherber:

And I know many business owners will say, what are some top tips you can give when you're in those survival modes, and you're trying to not be so over leveraged, and catch up, and move forward? What are some tips you've got for the business owners out there when they're in those years?

Herb Sargent:

Well, I think it was important for me to be pretty transparent with our people, and let them know that, "Hey, this is a really leverage deal. And if things don't go, well, we're all going to be out of work, including me. So, there's no guarantees here for anybody.' And so, it's important, I think, for me to be transparent about that, and make it clear, and communicate the situation we were in.

Herb Sargent:

Which wasn't a bad situation, it was just, it was a little more tenuous than most to go borrow the money to buy a company, that's five times your size. It just puts you in a risky position. So, it was important for me to communicate that, and communicate our commitment to the people. And in one of the quickest ways, and you know that you can do this is buy them really cool equipment, and have them get some nice stuff that they can get into.

Herb Sargent:

And their equipment fleet had been eroded over the previous five or 10 years. So, we moved in, and we couldn't buy a lot of equipment, because all of our borrowing power was already used up in buying the company. So, we went into a huge equipment rental situation that we eventually turned into ownership after a few years. But it was really communicating, and getting the people, showing them that we had a path forward. And if we all just work together, we'd make it.

Missy Scherber:

Wow. So, what I hear you saying is the transparency and communication, just being really upfront, which is vulnerability, being vulnerable to your team.

Herb Sargent:

Yeah. When we bought the company, our first meeting, I put the financial statement up on the wall for the superintendents and everybody to see. And I said this, or I guess the business plan, it wasn't the actual financial statement, but what we thought we were going to do.

Herb Sargent:

And I said, "If we do this, we'll make X dollars. And then, X times .5 goes to taxes, and the rest of it, X times .4 goes to equipment, and X times .1 we'll share with you." And so, really, and then when we did get the first-year financials, we put that up on the wall, and showed what we did. So, it really helped the buy in.

Missy Scherber:

I imagine that's not just the transparency and communication, but rewarding. And it's saying if you are in it to win it with us, there's some incentive at the end. What an awesome way to involve your people, which gets us to talking about that's one of your core values. And if I remember hearing on one of your videos correctly, is that your number one core value?

Herb Sargent:

It's first one to four, and it's not first by mistake.

Missy Scherber:

Now, tell me a little more about that. What strides have you taken to ensure your workforce pipeline as full, and your employees are well trained, being that that as your core value is investing in people?

Herb Sargent:

Well, we're doing more and more all the time. But as I told you, that middle five years, we've stayed away from the draft. And in 2015 or so, I had this aha moment like, "Holy Wow, I think there's going to be some growth coming. And we got to get some people in here to do this." So, I reasoned that we didn't need to hire 100 people.

Herb Sargent:

We needed to go chisel some really good bodies out of the countryside, over the next five to 10 to 15 years, and begin to build our workforce back up because we had a big gap in ages. So, we got together, and we started what we call Sargent Construction Academy. And that was for immediate high school grads. And at the time, what that was is we brought them in, they were paid on the first day.

Herb Sargent:

We had six weeks of training with our folks. And then, after that, we ask them to commit for six months in the field with us. So, that training included everything from light blueprint reading to small equipment, light, heavy equipment operation, some introduction to layout, introduction to personal finance, introduction to 401(k)s and retirement.

Herb Sargent:

It was really all encompassing, what we're trying to do is not just make good construction workers out of them, but make them self-sufficient and good humans going forward.

Missy Scherber:

I think that's phenomenal that you took the approach of not just the equipment and the onsite needs that you have from them, but I imagine it creates some less turnover, more loyal if you're helping them as a person. The human aspect of people is so important in construction.

Herb Sargent:

Well, it really is, and the way I look at it is if we just bring value to each other every day, we work long days, you know that. We work just long days long, long weeks, sometimes six, seven days a week. But if we get in the habit of bringing value to each other during the day, I believe that transfers easier to bring in value to your family when you're home at night, or in the weekend.

Herb Sargent:

And to me, we talk so much about work-life balance. And one way of looking at it is, well, I work 10 hours at work. Now, I need 10 hours of balance to balance that off. But I think if we just look at it, if we can make that a more qualitative look at that off time with your family, and we can increase the quality of that, I think it balances much better.

Missy Scherber:

Absolutely. And if their quality time is with you, the time they're with you, those 10 hours are, they're valued as the person. I imagine that significantly impacts those five, six hours at home with family.

Herb Sargent:

Yeah. And when people go home, we have an internal podcast, and we are recording with one of our construction academy grads yesterday. And he said, "Look, at the end of the day, I'm smiling. It doesn't matter what I did today, I'm smiling, and I'm just happy to be doing what I'm doing.' And when you go home, and you're happy, because you're glad who you're working with, and what you do for a living, it just makes it a lot easier to be a good family member, too.

Missy Scherber:

What a huge point of success for you as a leader, and for Sargent as a company that someone's saying, at the end of the day, I'm happy. That's a new era of construction that we're having to move towards for workforce development. What inspired you to do that? Did you grow up that way, or did you recognize that was a need? Tell me about that transition, because that's a new way of construction.

Herb Sargent:

So, I grew up around my grandfather a lot of, and my dad too, obviously. And I've had the opportunity to have an inordinate amount of mentors in my life. And when I think about all the people that didn't really have anybody, impart, any good mentoring to them, and then, I think about how much and how many people I had, I feel almost guilty about it.

Herb Sargent:

But I'm trying to pay it forward. And just those people that I dealt with for so many years, made it fun for me, and working out on the road. And usually, staying in motel rooms, or we just got to know each other, good camaraderie. And that just got worked into me in my early career. I guess it comes naturally to me. I've always said, when I'm at work, I want to have fun at work.

Herb Sargent:

Even though, so many times, you don't accomplish what you want to during a day, or three things go backwards, and four things go forward. That's just the way this business is because there's so many inputs to what we do that lay our efforts to waste sometimes. But to know that you can get up tomorrow, and make another stab at it is just where we've always come from, and we've always just had a great time at work.

Missy Scherber:

So, another great concept to bring into construction. Because it's such a serious line of work, I think there's just such a seriousness to what we do, especially in infrastructure, heavy civil. And that might be a turn off for some people like, "Wow, where do I fit into this." But to bring that fun aspect of the passion, the emotion of fun, that's an emotion that you're not supposed to show on a job site in the old days, right?

Herb Sargent:

I think it's important to be careful not to have so much fun that it looks like you don't take things seriously. So, we know when we can have fun. We know when we got to be serious. And certain owners, certain customers we work with, they just want their work done, and that's all. And lets you guys go have fun after work. But we try to enjoy ourselves quietly anyways.

Missy Scherber:

I love that you're working on finding that balance. So, tell me this, what advice would you give to other business owners when it comes to investing in, and developing training programs for your employees, and maybe with a business owner like us? So, we are small to mid, we're growing quickly. And we have not invested into really, developing our people. We see the need for it now. But I definitely have had moments where I'm like, "Where do you start? Where do you start? What's the important path?"

Herb Sargent:

So, it doesn't have to be expensive, and right now, we're having a debate in our company, and a very productive debate on different training levels that we want to do, and a facility to do those things. But it doesn't have to be expensive. For what we have right now, we literally converted our basement in one of our buildings, and finished that basement off.

Herb Sargent:

And we have week-long trainings for, let's say, what we call Junior Foreman. So, it's really just being observant about what kind of skills these folks need to have developed. And what I try to do is, the way we're trying to go with this is, is we're trying to develop them for the next level beyond where they're going next. So, we're trying to develop them for two levels ahead.

Herb Sargent:

And so, that when that opportunity comes for them to move, they're somewhat prepared for that. But it's really just trying to be observant about what kind of skills they need to be honing. And like I said, it doesn't have to be expensive. With us, we took one of our really, really good operations managers, and I asked him to be the workforce advancement director.

Herb Sargent:

And so, he's been working alone for the most part for five years with this academy. And then, he goes out when we don't have the academy, and he works with these guys. And he and I started in the business together. So, he's a, I guess, you call a seasoned. But he's got great skills and great teaching ability. So, it's really just being intentional about development, rather than hope it happens.

Missy Scherber:

Right. So, when you're intentional with it, do you guys have conversations with the high school grads that are coming into these programs on where they want to be? What does that look like introducing the idea to them of not just being in the training program, but committing to your company? I think that'd be important to talk about.

Herb Sargent:

Yeah. So, we do tell them, when you get done with this academy, you will be a laborer. That's because we believe that that's the way you have to learn this business. That's the way I learned this business. And so, they come out as laborers, but they're much better prepared for opportunities that come along.

Herb Sargent:

So, a lot of our guys end up going the junior foreman route. Some of them go the equipment route, some of them are truck drivers. And so, we're trying to populate the whole company with this group, this youth movement. And so, it's worked pretty well.

Missy Scherber:

I think that's awesome. So, being all about your team and your staff, let's transition and talk a little bit about ESOP because part of your succession planning for Sargent Corp was transitioning your business from you being the sole owner to an employee-owned stock program. Why did you decide to go that route?

Herb Sargent:

Well, there's basically four ways when you boil them all down to transition ownership of a company. You can do an outright sale. And that had been done before with our company. And it didn't really work that well. You can do an internal sale to managers. So, if there's three or four or five managers, you could do that.

Herb Sargent:

However, construction, especially if you have to have any kind of surety credit and bonding credit, you have to have very good capital structure in order to get bonded. And usually, managers in the company don't have that capital to support bonding program the size of our company requires. Another one is just to cease all activities, and have an auction.

Herb Sargent:

And that doesn't really help anybody, you don't get the value you want out of the company. And you have a lot of unhappy former employees. And then, the ESOP is one that we saw, really delivered all the attributes that we wanted. It could inspire and motivate the employees. We have continuity and succession. And it allowed me to stay in management.

Herb Sargent:

So, our ESOP is seven years old. I was 50 when we put it in place, so it allowed me to stay in management, and keep managing the company in the same way I had. It's very meaningful benefits to the employees. ESOPs don't pay federal taxes, and in most places, they don't pay state taxes.

Herb Sargent:

So, all the money you use to pay for taxes stays in the company, and eventually funds the buyout of the shares from the owner, me. And then, also, funds the buyout from the employees when they retire. So, for us, we felt like ESOP is the best way to preserve our culture, and provide a real stable footprint going forward, and give people a reason to really want to work and improve.

Missy Scherber:

Well, to me, it shows a true commitment to what your first core value is, which is investing in your people, which is just you're committed to that path, which is incredible. What were the staff like? I'm sure you had staff that had been with you a long time. Tell me about the feeling and potentially, I'm sure, the excitement when you made that transition.

Herb Sargent:

Yeah. We set up a meeting for the whole company, and we had three breakout sessions, and our CFO explained the financial piece. And I explained why we did it, why it was the right time, and what it was. And we also had another ESOP, who I'm friends with in Missouri, and they sent some employees over so they could do a panel discussion with those folks.

Herb Sargent:

And they'd been in ESOP, I think, for 15 years. So, I wanted them to be able to talk to real people, operators, foreman, laborers, truck drivers that had been in an ESOP for some time. The one thing we were very, very clear with them was, this is not a gift. Herb is selling the company to this group. And so, your value in the company, at the end of this year, if everything goes perfectly, will be $147.

Herb Sargent:

And I distinctly remember watching one of our truck driver's wives dropped her head on the table, like, "I wasted Saturday for this." But it's the same if you had a million-dollar apartment building, you had a few employees that kept that apartment building up, and you sold it to them for a million dollars, there's no equity there.

Herb Sargent:

So, either they can improve the apartment building, and gain value that way, or they can raise rents and gain value that way. And as they pay off the apartment building, pay you off for it, then they begin to build equity. So, it's really the same thing. Just in the context of 35 projects going on at one time, instead of one apartment building.

Missy Scherber:

Yeah. So, you gave them an understanding, it's still something to work for. But I watched your video that build with media you did for your company. I just thought it was outstanding, actually, watched it twice. And to see your staff member's pride in the company. And I think one of them even said something to the likes of when I see those trucks drive by, it's like, my name is on it. And it's like, "Wow," to have your field team, really, truly understand and believe that, the performance had to have just completely improved when they feel that sense of ownership.

Herb Sargent:

It takes a while for that sense of ownership to show up because really, their value starts at zero. They can't put any money-

Missy Scherber:

As it does for all of us.

Herb Sargent:

Right. And then, they have to, over the years, they accumulate shares, and the stock price hopefully goes up, and ours has. But the first two or three years is really hard to get much energy around, hey, "You own this, the stock price is up to $6 a share now from $1. And so, now you're ESOP account is worth $460 after so many years."

Herb Sargent:

But now, after seven years now, it's at the point where we have people approaching six-figure values in their ESOP shares. So, really excited about it. And the young people are the ones that are going to really, really benefit from this. They're really excited about how it's going. I'm so pleased that we did it when we did it, and for the reasons we did.

Missy Scherber:

That's awesome. So, what advice would you give other business owners on how we have these crucial conversations about succession planning? And when should that start? Is that now, or is that when we're 50? Tell us your thoughts on succession planning because you've done such a phenomenal job at working that out.

Herb Sargent:

Well, I've been lucky, too. So, there's been a lot of work that's gone into it, but they haven't been lucky. I would say, I think for contractor entrepreneurs, we find it difficult to think about succession. And I think part of the reason is, so much of what we do is built with inanimate stuff, like pipe, and gravel, and dirt, and excavators, and bulldozers.

Herb Sargent:

And so, the human element is only just a small picture of the small piece of that picture. When you start talking about succession. It's like all human element. And the amplitude of the variation that you can get can be so much greater when we're starting. And I frankly wasn't prepared to deal with that mentally. So, it took me breaking the thing in half.

Herb Sargent:

It took me to say, "Okay, we'll change the ownership of the company. We'll go to ESOP now, and we'll get the ownership changed. And then, I'll deal with the management succession later on." When I retire, who's going to take over? So, simplifying it to some degree is a big key. To me, what it really boils down to, if you don't have somebody that can take over for you, that's really the problem.

Herb Sargent:

That's when people say, "Okay, we got to sell, or we got to do something different." So, to me, it always ends up boiling back down to developing people. And when you develop people, the ones that you can see, maybe have the gas in their tank to be more of a business leader.

Herb Sargent:

That's when you need to introduce them to the idea of balance sheets, and P&Ls, and the financials, and what drives the financials, and surety credit, and bond credit, and all these things. So, they begin to understand a little bit more what's in the business. Because so many people don't. They don't realize that you wake up in the middle of the night, 2:00, and go, "Oh, yeah, payroll."

Missy Scherber:

It's tomorrow at noon. We'll be okay.

Herb Sargent:

I think we're just need to focus on development. The more you push people from the bottom, the better you can see what they can do from the top.

Missy Scherber:

Absolutely. So, I really like the parallel that you're not just developing leaders out in the field, but that you're also developing leaders in management. And I'm a little curious about that a little more. When you see a good manager, and you're like, "Wow, they definitely have the potential to be a great business leader within this company," what are typically the first steps?

Missy Scherber:

What does that look like for you? And I'm asking a little bit selfishly, because we're in that position right now, where we are being mentored by a large excavation company here in the Twin Cities. And one of the first things he said is, who's your right hand? Who's your next person? And we struggled with that a little bit like, "Gosh, we have not thought about that."

Missy Scherber:

We've just been so inundated, as we said, with the product, and the people, and the pushing through. What advice would you give to owners who are in our position with those managers? How do you find them? How do you train them? What do you look for in a good manager that you can truly trust to build a bigger company?

Herb Sargent:

I guess I would look for people that have the ability to take difficult situations, and render them into bite-sized pieces. And move ahead with that. So, some people can do that, but they can't move ahead with one of them. And some people can't do it all. And some people can say, "Okay, we can take this problem, break it into three pieces, and move one ahead at a time."

Herb Sargent:

I think, in this business, a lot of times, we think our plan has to be perfect. And so, that immobilizes us, and I think we really need to just go like, "Okay, we got a decent plan." Because a decent plan, as long as people are bought in, and they want the same thing you do, which is success. A decent plan can work better than the perfect plan sitting on a shelf.

Herb Sargent:

So, I'd love for somebody that can break it down like that, and move pieces along, and get buy-in from people, and delegate the things that need to get delegated. If you've got somebody that can't let go, that's not the right person. You've got to have somebody that can delegate things to get done. Because it's just difficult, as you folks are learning, and I learn, it's difficult to do it all yourself.

Herb Sargent:

When I was first in business, first 10 years, we did about $10 million worth of work a year, and I was literally running every job. I was going to every single job every single day. And I was the limit. I was the big bottleneck of the company until I hired another guy, who ended up being our COO at Sargent. And he gave us a lot more credibility and a lot more capability. So, sometimes you got to find that person.

Missy Scherber:

Yeah. I like that you taught. So, this is probably the most reach out that I get online are from owners who, okay, now, we're lost. We've grown, we're at $5, $10 million, but we do everything. And that transition of what's after that is hard. And like you said, it's finding that right hand, who's that next person who can give the credibility, help remove some things off your plate.

Missy Scherber:

But I like that you pointed out that a good manager will be able to delegate and change. And so, that was really helpful. Anything else that comes to your mind when you think about your managers that Sargent Corp, just because I do get asked this so much, how do you hire a manager, and what do you look for when you're ready for that next person where it's not you doing it all? Anything else that comes to your mind with that?

Herb Sargent:

Sometimes you don't know what you're looking for until you see it. There're all these great business books and all this. Sometimes, you just don't look, you don't know what you're looking for until see it. And in that regard, we hired a guy who had been with another company for about 15 years three years ago, I guess. And he came on to run our materials division. And a little over a year ago, our Chief Operating Officer retired, and we move this guy into that role, because we found what we're looking for, because he showed it to us, in a way.

Missy Scherber:

Wow.

Herb Sargent:

So, I think you have to be careful that when you are looking for that manager, I think it's a common tendency for people to just always go back down to where they were, to where they're comfortable with. So, you got to find somebody that will rise to that challenge, and then build a group underneath them, and get their buy-in.

Missy Scherber:

That's not standing advice, which brings me importantly to the next question of describe your leadership style. Let's start there, let's say you're chuckling a little. What is your leadership style?

Herb Sargent:

I'm pretty laid back, overall. I can't get excited sometimes. But I'm pretty laid back. I try to lay things out the way that that I think is best, but there's a lot that goes into that. There's a lot of collaboration that has to take place. And we're still in a way, there's three of us executives in the company, and we're still finding our way, how we agree on things because one of them is new, and the other one has been with us three years.

Herb Sargent:

So, again, I'm the seasoned one in the group. But I'm trying to back away from the decision-making song. Now, I joke that I've got a dream stock of ideas that I have, and I was talking to Mikel Bowman. And he said those are not dream stocks. Those are vision stocks. So, stop calling them dream stocks. So, I try to put in some not-so-subtle hints when I think it's necessary, but I like to let people do their jobs.

Missy Scherber:

Yeah. So, you definitely trust, it sounds collaborative trusting. And then, also, one of the things we put on here in our questionnaire that we'd like to send out is emotional intelligence, which fascinated me like, "Wow, that is an important quality to have as a leader is that you understand the emotions of what people are feeling." And how has that served you as a leader?

Herb Sargent:

Well, I can't say I've mastered that. I do think it's important. But I think having some empathy for what our people in the field and going through, just to be right in front, it's been a long time since I've been in the field, and having to deal with the traveling public every day. So, sometimes, I cannot have the right amount of empathy for what those folks go through day in, day out.

Herb Sargent:

So, I need to think about that. I need to make sure that I'm factoring that stuff in if I'm thinking we've got a problem on a job that needs to be addressed. I need to think about those things too, not just, "Damn it all, how can we only have this done?" And trying to be supportive of them, and not just come at them with this is what you need to do. But hey, let's sit back and let's climb up on a hill.

Herb Sargent:

Look down here at what we're trying to build, and try to get a better feel. Increase our situational awareness around this whole thing, and get a better feel. And when you can see the whole thing, they say, it's almost impossible to see the whole picture when you're in it. So, if you can back away, and see the whole picture, and I think they just appreciate that you're willing to put that time into it. And give them a break, really. It gets them out of the battle for a little bit. And you can talk, and go through it. So, I guess, when I talk about that, that's what I think.

Missy Scherber:

Yeah. I think you just dropped a huge leadership principle for us, because the reality is things do go wrong on jobs. There's human error, there's elements that weren't predictable. And we all deal with that every day in construction. And I picture the old school ownership, come out, yell at them, that's the wrong way, move on.

Missy Scherber:

But you just dropped huge hints on how to not just solve the problem, but never have it happen again, to learn from the problem, and to be collaborative, and empathetic towards how did the situation affect the people who are in it, and we can only see that if we go above and overlook.

Missy Scherber:

So, I think that is just a huge, I just was taking some notes, like that's something really big that I hope our audience hears, and learns from, and rewind back two or three minutes, and listen to how you handle a problem on the job site, with emotional intelligence in collaboration. I just think that's phenomenal.

Herb Sargent:

One of the most important things is learning how to fix the problem that you have is one thing. But learning how you got into the problem to begin with is more important than that. So, trying to do, and I don't mean have a half-day-long meeting on this, but just what happened here to get this turning the way it is. Just face to face.

Missy Scherber:

I think that's great wisdom for all of us to owners, foremen, superintendents to really learn from. So, thank you for that. So, speaking of problems, let's talk a little about 2020. Or the challenge that came with 2020. What were the biggest obstacles that you overcame? And what lessons are you bringing into 2021?

Herb Sargent:

Obviously, March of last year, our biggest challenge, I think, was the fear of the unknown. We didn't have a clue what we were into. And I've been an instrument pilot in the past. So, I liking it to being in the fog, in your plane, and all your gauges shut down. You don't know where you are. And you're tapping on the gauges, and you're going, just give me the altitude, give me a head, and give me something. And that's the way I felt we were in mid-March.

Missy Scherber:

What a great way to describe it. I'm from the aviation family. And right away, it's like, "Yes, that's exactly in the fog."

Herb Sargent:

Yeah. And it made me, like I'd wake up in the middle of the night, and thinking I was going through my instrument test again, and waiting for the instructor to pull the goggles off so I can see. That didn't happen. But we felt like that fear, we knew our folks were feeling it. And even though we were feeling it, we felt like we had to be really clear with them.

Herb Sargent:

This is weird, we don't know where we are, we don't know what we're going to do, we're in this plane, and we don't have the gauges working. And if things get weird, we're going to have to toss some baggage out to lighten up the load here. And so, we were really clear about that, and tried to communicate that. And that's when we started our podcast internally.

Herb Sargent:

And so, just to communicate where we are right now, where we think we're going to go, and how we can navigate it, and that we're all in it together. That was the most important thing. And that we are making contingency plans for whatever happens. We met for hours, and hours, and hours, three or four of us, in charge of the company.

Herb Sargent:

And if this gets this bad, we've got to do these things. If it gets this bad, we've got to do more things. If it gets that bad, and we were talking about pay cuts, we're talking about all kinds of different things. But the way it all ended up, we tried to be very patient about it. And the way it ended up, we didn't have to put any of those things in place. We never got shut down.

Herb Sargent:

We were very, very fortunate that that we never got shut down. And when I think about all the businesses have struggled so hard. Again, it's almost like I feel guilty, because our folks stayed in it, but the great thing that I felt was our folks didn't have to go to work. They were being paid pretty handsomely to stay home. And I went down to one of my jobs, and just got in a circle with the crew.

Herb Sargent:

And I said, "I just want to tell you guys, I want to thank you for coming to work." And this is in Portland, Maine, which is the biggest city in Maine, in our little epicenter for COVID. And one of the guys said, "I'm glad to be working, Herb." And it just made me gush for the leadership, that young guy. And he didn't know it was leadership. He was just, but that's leadership. And it was cool-

Missy Scherber:

It is. Yeah. So, you were able to really probably live out all the investing you've done in people when crisis came. What just clicked and resonated with me when you said that is there's a payoff to investing in your people. And-

Herb Sargent:

It definitely is.

Missy Scherber:

... that can come in crisis. Yeah. And it's like, "Wow."

Herb Sargent:

I'm here in this company because the people are here, not the other way around. And I think they know that. And so, when the chips get down, they continue to work. And I saw our execution improved over the previous years dramatically in 2020.

Missy Scherber:

Wow, wow. So, you really saw the challenges turned into something where the team came closer together and performed even better.

Herb Sargent:

Yeah. I'm not sure I'd want to go through it all again. But there were a lot of good things that happened. And just our internal communication improved so much over the last year in so many ways. And that's one of the things, I think, one of the big elements that was missing in our company is I don't think I communicated well enough. So, we've done a lot better that way.

Missy Scherber:

And one of the ways I noticed is you've done that internal podcast, which I think is a great idea. It's for your staff, and you interview some of the other staff, and you have guests on there. I think that's outstanding.

Herb Sargent:

It's a project. I've never done a podcast before. And we decided to do it. So, Herb studied on what to get for equipment, and in software, and all the stuff. And we set up a room, and I've got it so I can throw it in the back of my truck, and take it to job, to do a podcast on the job. So, I think our folks like it. We peaked out just under 400 employees last year, and we were getting about 330 lessons a week. That's a hell of a lot better than people that read email or read mail, they get to hear that.

Missy Scherber:

Absolutely. That's a huge success, especially with the type of industry we're in knowing they're in the truck, they're in the machines, they're on site, and they're still engaging with that. What a huge success.

Herb Sargent:

And they can listen when they want.

Missy Scherber:

Yeah. I think that's a great way for us to start rethinking about how we communicate with our teams, and you just gave a great suggestion. They can listen to this when they want. We don't all have to attend this meeting that's before or after hours, which they want to be with their families. So, definitely noted there. As we close the conversation in leadership, which I could literally just go on, and on, and asking you questions on leadership.

Herb Sargent:

I might be out of gas on it. I don't know.

Missy Scherber:

That's okay. So, really quick with the book that you recommended, that you have really enjoyed is Atomic Habits by James Clear. if you were to leave us one nugget from Atomic Habits, what would that be?

Herb Sargent:

Oh, wow, there's an awful lot of them. So, one of the concepts that he talks about looking at problems from a different mindset. So, one that I found really helpful is a lot of people just look okay, how are we going to make this succeed? But if you look at what's in front of you and say, okay, that's going to fail. And how is that going to fail?

Missy Scherber:

Oh, wow.

Herb Sargent:

And so, then you start thinking about the different ways it's going to fail. And then, you can make plans accordingly. So, as an example, you picture your marriage, and you say, okay, that's going to fail. We don't want it to fail, right? So, what we're going to do, how would it fail? Well, there's probably two or three cardinal things that can make it fail.

Herb Sargent:

And so, we know we're going to avoid those things. Or if you look at safety in the course of the day, if you drive to work, and you're on the way to work, and you say, someone will get hurt today. When you get out of the vehicle, I think it makes you consider all the different ways someone's going to get hurt today. And I think he calls us inversion thinking.

Herb Sargent:

But just for me, it became a powerful way to look at what we're doing. And how do we keep things from being a failure? And it's the backside of the way we usually approach things. And I tend to be an optimistic guy. But frankly, being optimistic gives me my blind spots. So, I've got to try to figure out how to unearth those.

Missy Scherber:

Yeah. I think that's great. Because a lot of entrepreneurs, I think we are blindly optimistic, and we do have those blind spots. To push, you have to be. So, you're saying this really helps you think through differently and give you the ideas ahead of the problem?

Herb Sargent:

Hope so, yeah.

Missy Scherber:

That's awesome. I'm going to put that one on my list. So, really quick, you're five years away from being 100-year-old company. I just think that's so exciting and fascinating. What are you working on? What's the next five years? What are you thinking through? What's your priorities and your focus as you approach 100?

Herb Sargent:

So, my priority really is people. My priority is developing people, getting more people in the door. And I'll say it again, the mistake I made from 2010 to 2015, skipping the draft. I think a lot of companies did that. And I think that brought out the worst in all of us in the last three, four years. When people brag that they poach people, I have project managers go to a pre-bid.

Herb Sargent:

And the guy asked him, 'Hey, what will it take to get you to leave Sargent and come to me?" If we would just continue to invest in people, and continue to go to the draft, we could alleviate that. If everybody took the responsibility to bring in people to the industry. Now, there's a lot of competition out there for it. But if everybody took that responsibility, we wouldn't have had the problem we've had the last four or five years.

Herb Sargent:

So, I'm going to make sure I'm going to do my part. Nobody owes me anything. I'm going to make sure I do my part. And frankly, some of our people will train, and they will go to somebody else, it's going to happen. So, really, for me, the next five years is trying to populate the company with enough people who have been trained, and developed to the point in safety, in execution, in how to bring margins of safety into their personal and professional lives. So, that if there's a hiccup, it doesn't create chaos. That's where I am.

Missy Scherber:

I think that's great. And you're taking workforce development from just a conversation, or a committee, or an organization. There's so much of that out there. You're saying workforce development is an action, and it's a personal responsibility. And if we all do something, we're going to be okay as an industry rather than, like you said, waiting.

Herb Sargent:

I just hate for the day to come back when we, as an industry, show the worst of ourselves again, and that really bothered me.

Missy Scherber:

I think that's great. So, with CONEXPO-CON/AGG, I have heard that you have a grandfather that was a super fan. Tell us really quick, how long did he attend the show? Do you have any memories of him or the show? So, you're the first guest to have a grandpa who attended CONEXPO, and that's very cool.

Herb Sargent:

He started in the '30s. And in those days, what he told me is they were in Chicago, and they always drove to them. So, he started in the '30s. And I can't remember exactly, I think it was 2003 was the last one he went to, and he passed away in 2006. So, I believe he was either 94 or 97 when he went to the last one that he went to.

Herb Sargent:

And this guy, he was really in good shape as a 90 something year old man. And I can remember, he couldn't wait to get up in the morning and get going. And of course, us young guys at the time, we'd go out, and stay out half the night. But he didn't, and he'd walk, and walk, and walk, and walk. And I would just like, I got to stop, and get a beer here somewhere.

Herb Sargent:

And finally, he'd say, "Okay, Herb, I'm ready for a nap." So, I would take him to his room. And I remember the first time he went down for a nap. And he called me 20 minutes later, he said, "I'm ready to go now." And I said, "I thought you were going to take a nap?" He said, 'I had a 15-minute nap, I'm ready." I was like, "Man," he had me worn out. But he just loved people.

Herb Sargent:

And he loved equipment. And he knew the best equipment was useless in the hands of less than the best people. So, he always tried to surround himself with great people, and he did. Tell you, some of the guys that were there when I started working when I was 15, 16. Really, great people.

Missy Scherber:

I love the correlation you bring. You can have the best equipment, but you have to have the best people. And that's been a continued theme of the conversation with you. And I think as a seasoned leader in our industry, you're really bringing it back to something simple, which is the people, and the more we invest in them, the better we are.

Herb Sargent:

That's all it is. Talk to anybody that's been trying to get the people for the last five years. And so, we're just doubling down on that bet. We feel like we could buy all the equipment we want, but if we don't have the people to do it, then it's wasted capital. So, we're doubling down on the personnel bet on the humans.

Missy Scherber:

Yeah. I think it's great to see the success that that focus has brought you. And I think that huge moment where amidst COVID, you have someone on a job site, who's saying I'm here to work, and I'm proud to be here. I think we really can all have a big takeaway from that that if we simplify, get back to the people.

Missy Scherber:

Because as an owner, I feel like you're thinking about the pipeline, and what's next, and the equipment, and the tech, and the materials, and the cost, and you're like, the people, the people, the people. I really learned a lot from this. So, greatly appreciate you willing to share your nuggets, and wisdom, and continuing to bring me back to the one simple thing that can build something big and great in our industry, which is people.

Herb Sargent:

One of the things about people is you want to help people reach their potential. But the more you put into them, the more potential they have. So, they never really reach their potential. It just keeps growing. And for me, it's just such a fun thing to watch people. We had this podcast yesterday, and I got a young guy that's, I think, 19, 20 years old, and he's just loving life. He didn't take on any college debt. And he's doing better than most of his teachers were when he was in school, and so it's good.

Missy Scherber:

It's awesome to see that. So, what we'd like to do to close out is a little rapid-fire round. This is just fun few questions.

Herb Sargent:

Oh, boy.

Missy Scherber:

And there's one question not on here that is an important one to me. So, let me start with this. What was your very first job? Was it at Sargent?

Herb Sargent:

My very first job was working in the shop at Sargent scraping gaskets off belly pans for D8s and steam cleaning parts as they came off machines to be rebuilt.

Missy Scherber:

Wow. What about your first car? What was your first car?

Herb Sargent:

1973 Pontiac Grand Prix.

Missy Scherber:

There we go. And I want to throw in this, what was the first piece of equipment that you operated? So, you were working in the shop, can you remember the first piece you hopped in?

Herb Sargent:

I think it was probably an excavator.

Missy Scherber:

Yeah. My husband says best machine out there.

Herb Sargent:

Well, that's what everybody wants to run. I personally, I think the excavators are great thing to do some things, but people tend to use them for everything. And they're not the best thing for a lot of things. I like watching a guy with a dozer that can really make it work. Yeah.

Missy Scherber:

Yeah, I did Blademaster. Now, Herb, here's a good one. If you weren't doing this, what would you be doing?

Herb Sargent:

I'd probably be writing or I'd be a chef. I don't know. One of those. I love to cook.

Missy Scherber:

That's great.

Herb Sargent:

Nobody likes to eat what I cook, but I love to cook.

Missy Scherber:

Okay. I will take a try if it's got bacon in it. Now, we all have to go to the gas station as part of the construction life we live. What is your go-to gas station food? And this answer always tells me a lot about who [inaudible 00:52:25] some candy.

Herb Sargent:

Slim Jims. Slim Jims.

Missy Scherber:

Hey, that's a good one.

Herb Sargent:

Yeah.

Missy Scherber:

What song gets you pumped in the morning?

Herb Sargent:

Well, I don't listen to music a lot in the morning. But there are a couple songs that I like a lot, that really move me. One is I Can Only Imagine by MercyMe. And then, another one is from when I was a kid. Sultans Of Swing by Dire Straits. I love them.

Missy Scherber:

Got it.

Herb Sargent:

I love that song.

Missy Scherber:

I can only imagine it's a good tear-jerker.

Herb Sargent:

Yeah, it is.

Missy Scherber:

It's a very inspiring song. Yeah. Who is one person that you wish you could have dinner with?

Herb Sargent:

That's easy, Jesus. And I think that's going to happen. Second would be Mark Twain.

Missy Scherber:

Really?

Herb Sargent:

Yeah.

Missy Scherber:

Two great answers. Two great answers. What is your dream piece of equipment?

Herb Sargent:

Well, I just told you, I'm a sucker for a well-balanced bulldozer.

Missy Scherber:

The dozer, yeah. And what do you predict will be the biggest disrupter for your business in the next five years? I have a feeling and know what your answer is.

Herb Sargent:

So, the economy is going to be the potentially biggest disrupter. But depending on how that goes, labor will be, I think. So, the people that are in the right position with labor, I think will be better. This slower time, I think we're going to have over the next whatever it is, two to three years, in some regions, it's going to give us a chance to really take the pressure off our people some because we were all running around with our hair on fire for two or three years. And we're taking the pressure off at some, and we're giving them a chance to learn a little better. Under less stress.

Missy Scherber:

Are you looking for the opportunity despite the economic downturn, I know a lot of people are talking about what is this economy going to look like? And I've started to try to ask our team, what opportunities lie within this economy?

Herb Sargent:

Yeah. There're so many potentially good opportunities. But understanding what the leverage points are that kick them into play is really the key in being ready to, I guess, to me, looking at what's the worst-case scenario? What's the most likely scenario? And what's the best-case scenario? And having contingency plans in place for any Have those three. That's one of the things we're trying to work on now is understanding the worst-case, best-case, and the likeliest.

Missy Scherber:

Yeah, yeah. So, I think this was power packed of so much wisdom and knowledge. What are ways our listeners can keep up with you and Sargent Corp? Are you LinkedIn, Instagram?

Herb Sargent:

Yeah.

Missy Scherber:

Okay. How can we stay connected?

Herb Sargent:

I'm pretty quiet. I'm on LinkedIn a fair amount. I usually post once a week or so. So, they can follow Sargent on Instagram, Facebook, and in LinkedIn. That's really about it.

Missy Scherber:

Awesome. Unless I wrote you in for another episode, because this was very, very insightful. Even just for me as a business owner, and again, just driving home, thinking less about the product, and the elements, and the product development, and the people, and thinking more about people. That I really appreciate you helping us reframe our thought process with that.

Herb Sargent:

And this has been a while for me to get to this place, and I've been in business now for about 30 years. And it may sound like I've got it all figured out, but I didn't know. I was 50 before I got any succession things going on. But I would say don't wait until you're 50. Thing is taken care of much earlier.

Missy Scherber:

Think about that sooner. Well, thank you again for sharing your time with us. I know you're very busy with a large company, just about 400 employees. We couldn't value your time more, and greatly appreciate the wisdom you shared with us today.

Herb Sargent:

Thank you. Hey, can I give one person a shout out?

Missy Scherber:

Hey, yes, absolutely.

Herb Sargent:

And you may have heard of this guy. His name is Catman Shawn.

Missy Scherber:

Yes.

Herb Sargent:

Yeah. He's a friend of mine. And we get together about... trying to get together every month on C-suites. And he's a lover of construction, lover of cat, and lover of everything construction.

Missy Scherber:

So, for the listeners who might not be familiar with him, I'm very familiar with him. What is this handle on Instagram? It is it Catman Shawn?

Herb Sargent:

I think it's Catman Shawn, S-H-A-W-N. He's changed it a couple times. So, I'm not sure, because I'm not on Instagram anymore. There was too much-

Missy Scherber:

Okay. I'll make sure to put it on... we'll put it on the transcript so that people can follow him. And I'm sure he appreciates the personal shout out, and I'm giving him a second personal shout out. He is definitely one to follow, and learn from. And you also brought up Mikel Bowman. I think, what a phenomenal human being.

Herb Sargent:

I really enjoyed talking to him. Yes.

Missy Scherber:

He's a great guy. I love what he's doing with his consulting business. So, I think you gave some great personal shout outs, and just some personal feedback for us to walk away and listen. So, thank you again, Herb. We really it.

Herb Sargent:

All right. Thank you, Missy.

Missy Scherber:

All right. Well, have a wonderful day.

Herb Sargent:

You too.

Outro:

And that's going to wrap up this edition of CONEXPO-CON/AGG Radio. If you liked the show and think other people should listen too, make sure to subscribe, and leave a review on iTunes. We'll be back next time with another great guest. Until that time, be sure to visit conexpoconagg.com/connect for even more ways to connect with the industry.

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