CEO of the Year

CEO of the Year


1% engineering; 99% everything else

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It’s mid-summer 2005, on the construction site for the bridge across the Churchill River. Despite the heat and black flies, work is under way on the approach causeway for this critical $25-million link in the Trans-Labrador Highway near Happy Valley-Goose Bay. But the crew of Pennecon Heavy Civil Construction has a problem. The Bailey-style, cantilever bridge includes three spans of 120 metres. In order for these to be pulled into place over the river, concrete piles must be securely driven deep into the sandy riverbed. The problem is, no one on the crew has the experience to do that. When Larry Puddister, the newly appointed head of this division of Pennecon Ltd. arrives on site from St. John’s, he’s dressed in coveralls and boots. He has assessed the situation and has the solution.

Larry Puddister

Atlantic Business Magazine’s 2016 CEO of the Year, Larry Puddister Co-chair, Pennecon Ltd.; CEO, Newcrete Investments Partnership Inc., St. John’s, N.L.

“I drove the piles myself over six weeks; 240 of them, some down to a depth of 100 metres,” recalls Puddister. “I went from vice-president to pile-driving superintendent in order to get it done.”

We’re seated on swivel chairs at a round table shoved into the corner of Puddister’s unassuming first floor office in Pennecon headquarters. Just the other side of the narrow parking lot outside his window, four lanes of traffic on Topsail Road bustle between Paradise and the provincial capital of St. John’s. Puddister is dressed neatly in a plaid shirt and jeans. He sits upright, occasionally leaning back, or bending forward to fidget with his interview notes. His voice is quiet and his direct gaze can be slightly unsettling.

“That’s one of the things Ches Penney told me he was most proud of… when I did that,” says Puddister with a reassuring grin. “He many times said, ‘that was the biggest project we had taken on at that point and we would have gone bankrupt if you hadn’t gone and driven those piles.’” In the intervening 10 years, Larry Puddister and Pennecon have come a long way.

Joining us at the table in Puddister’s office, with her own sheaf of notes is Sarah Constantine, communications manager. Impeccable in a green suit, she maintains a professionally silent presence except to nod encouragingly or to suggest additional information as Puddister negotiates his way through the interview.

Puddister is co-chair of the Board of Directors and co-owner of Pennecon Ltd. among other titles. The company has become an industry leader with 1,100 professionals and skilled tradespeople working across Canada, earning accolades such as Canada’s Best Managed Companies designation, and winning coveted service contracts for megaprojects in Newfoundland and Labrador such as the Lower Churchill, Hebron, White Rose Extension, and the Long Harbour Processing Plant.

1,000
The only obvious luxury in Puddister’s office are two original paintings that depict bird-hunting scenes. The one he sees every time he looks up from his desk shows a German short-haired pointer, tail straight out and nose in the air. “I have one of those,” he says and then indicates the other painting, “and a wire-haired pointer, and a Brittany spaniel.” He leans back in his swivel chair and smiles. “I like dogs,” he says and laughs, “…enough to have two puppies at the same time.”

But the dogs have a practical purpose too. “I like hunting. I hunt all over, for everything. But I am mostly a small game hunter,” he says. He used to hunt big game but has switched to the hunt that requires more finesse. One of his favourite annual trips is hunting ptarmigan with his dogs on the remote Buchans Plateau, high in central Newfoundland.

Larry Puddister

May 12, 2016: Atlantic Business Magazine publisher Hubert Hutton presenting Larry Puddister with CEO of the Year award, in front of a capacity crowd at the Delta Beausejour in Moncton, N.B.

“Tell him about Saskatchewan,” urges Constantine.

“I hunt goose and duck in Saskatchewan every year with my buddies,” he says.

The ring tone for his mobile phone is a duck call. “Last year there were 10 of us and we shot almost a thousand geese.” He also hunts pheasants, turkey and deer three times a year on an exclusive 940-hectare hunting reserve called Griffith Island in Owen Sound. “It’s my golf course.”

13
Puddister, now separated with two grown children, spent his childhood in Bay Bulls on Newfoundland’s southeast coast. His father Lar, who is a fisherman, and his mother Isabelle, both worked in the local fish plant. And, when he was 13, Puddister joined them on the line eventually working his way up from “cutting cod tongues” to one of the lucrative jobs “behind the freezers.”

After graduating from Mobile Central High where, “I didn’t win any scholarships and was a little bit troublesome,” admits Puddister with a wry grin, he took a job with a local construction company. “It was better than working in the fish plant.” For the next two years he trained on the job as an operator for loaders and excavators, but he wanted more.

“Not that there’s anything wrong with running an excavator,” says Constantine.

Puddister’s father wanted him to study navigation but he wasn’t keen on spending his life at sea. “My mother wanted me to be a doctor,” he laughs. “Engineering was her second choice.” In the mid-1980s Puddister was accepted to both engineering at Memorial University and navigation at the Marine Institute.

The summer before he began his studies, he had a fateful meeting with John Mulcahy whose wife had taught Puddister in high school. An engineer with McNamara Construction, Mulcahy told the young man, “As soon as you finish your first term let me know. I’ll make sure you get a work term.” That clinched the deal.

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Despite what may have been underperformance in high school, Puddister’s engineering studies exhibited his trademark ability to focus: he graduated with an award for the highest average. “I worked hard for my grades. Whether I had to or not, I couldn’t say.”

Mulcahy proved good on his offer. Puddister spent every work term with McNamara and was well paid, partly because of his experience in construction. He graduated debt free and immediately went to work as project manager for McNamara on the fixed link to P.E.I. from October of 1993 until the winter of 1996.

Puddister believes the engineering degree is a rite of passage for the role of heavy civil engineer in industry. “It may be different for pure engineers who work on design in engineering firms, but for those of us in construction, it’s one per cent engineering and 99 per cent everything else,” he says. “Once my managers reach a certain level, I expect them to become businessmen and their income statement and balance sheet become more important than their slide rule,” he says.

Work on the fixed link continued 24 hours a day, seven days a week, with 400 people labouring on the main excavation project and several other large contracts. Puddister was 27 but took his authority in stride. “It seemed natural to me. But I had a lot of help.”

Larry Puddister

One of the most informative and entertaining highlights of Atlantic Business Magazine’s 2016 Top CEO awards gala was celebrity emcee Mark Critch’s unscripted Q&A with CEO of the Year, Larry Puddister.

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Near completion of the fixed link, Puddister bid on a hydro project for McNamara with Nicholls Radtke Ltd., a large mechanical construction company in Ontario. They won it. Bill Nicholls, the project proponent, and a successful entrepreneur, was impressed by Puddister and they developed a strong business relationship.

Fred Taylor says such a friendship is predictable. At 80 years of age, he is today one of Puddister’s two “go-to guys” with Pennecon Ltd. A director on the board of the company, he worked with founder Ches Penney when he entered the entrepreneurial arena in 1963.

During a brief telephone conversation, Taylor says that Puddister has the kind of personality that builds business relations naturally. “Larry is a good negotiator and he makes friends with anyone he does business with.”

Back at the interview, Puddister explains that he began to see eye-to-eye with Nicholls during contract negotiations. “Then as we started construction and met some challenging targets, I got to know him as a friend.”

“I was moose hunting with Bill one weekend, and during the trip he said, ‘You know, Larry, you should be working for yourself. You shouldn’t be working for somebody else,’” recalls Puddister. “And I said, ‘Well I’m a poor boy from Bay Bulls. I don’t have any money. How would I possibly start?’ and he said, ‘Why don’t you tell me how much money you need.’”

Puddister knew that one of his strengths was his fearlessness and he needed it then. “I had a good job. I was racing up the organizational chart. So when I decided I was going to quit and start my own company, people thought I was nuts,” he says. But Puddister knew what he wanted. “I always intended to work for myself. So I took a deep breath and took the plunge.”

A few months later, Bill Nicholls’ seed capital in hand, Puddister returned to Bay Bulls and started Northland Contracting. “With nothing but a pick-up and a shovel,” he bid on a contract to construct 25 kilometres of the Trans Labrador Highway. And he won it.

“Just like anything, the more you practise calculated risk the more capable you get at it,” says Puddister. “I don’t know where that urge for risk comes from. Maybe stupidity?” he says laughing as he leans back in his squeaky chair.

But Puddister admits that, after taking a few hard knocks in business, he’s become more of an accountant than an engineer. “Northland won some big projects early on and I made a lot of money,” he says. “I had a bit of a Midas complex. I thought I’d make money at anything.” He then proceeded to lose money on two ventures in his home town because he didn’t study them well enough. “I bought a boat tour company because I liked to go on boat tours. That was a mistake. I bought a restaurant and it was a miserable failure. It wasn’t all success,” he admits.

Between 1997 and 2005, despite occasional setbacks, Northland employed up to 200 people. As president and general manager, Puddister incorporated Northland Holdings for land development and Northland Industries for welding and fabrication. His success was attracting attention.

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In 2005 Puddister took another plunge when he merged Northland with Pennecon Ltd. to become a shareholder and managing director of their heavy civil division.

His other “go-to guy” at Pennecon is CFO Jerry White. A chartered accountant, White joined Pennecon in 2000 after serving as auditor for a decade. Contacted by telephone, White summarizes Puddister’s impact: “We used to bid on $5-to-10 million jobs in the province. After Larry came, we started bidding on the monster projects across Canada. He helped us become one of Canada’s 50 top companies,” says White.

Puddister understands what it takes to lead for growth. In his nomination for Atlantic Business Magazine’s Top 50 CEO award he wrote, “As a leader you must empower the people around you to perform to their best ability, keep yourself open to new ideas and avenues for growth and diversification… and never let fear get in your way.”

Larry Puddister

Larry Puddister with CEO of the Year award

In less than two years, Puddister’s ability to motivate the team was showing results. His division had expanded into Alberta, British Columbia, and Manitoba. In 2006 he was invited to the boardroom table and appointed Pennecon Ltd.’s COO.

That same year he led the buy-out of Pennecon’s partners and, when the dust settled, two shareholders remained: founder Ches Penney with 51 per cent and the new CEO Larry Puddister with 49 per cent.

Even over the telephone, Fred Taylor’s respect for the Pennecon co-chair is audible. He says the company is advancing even though Ches Penney is no longer active. Puddister has stepped up to run the business along with the board of directors. “He has a strong personality but he’s liked by everyone,” says Taylor. He believes Puddister has the ability to make Pennecon one of the biggest construction companies in Canada, employing 5,000 or more across the country. “You have to have street smarts in this industry. But more than that, to last, you must have integrity. Larry has that. His word is his bond.”

50,000
For eight years, as CEO, Puddister continued to grow and diversify the company by adopting the “platinum rule” of management. He describes this rule in his nomination form as treating others not as you would like to be treated but as they want to be treated. “That’s what is most important — recognizing that everyone on your team is different, and will work best with a leadership style that is tailored to them.”

However, Puddister admits, “I am not patient.” But, having worked with an impatient supervisor early in his career and observing the flaws of that style he writes, “I learned to be sensitive to people’s needs when it comes to direction, to fully and adequately explain my intentions and expectations, and answer questions openly.”

Among the mantras Puddister repeats to his team is this one: “If you want to advance, make sure your replacement is ready.” And in 2014 he demonstrated that he could take his own advice. The move was dictated by a long-held recognition that 2017 will bring a downturn in the provincial construction industry. All the major projects such as Muskrat Falls, Hebron, Long Harbour, would be completed with nothing on the horizon.

“We rode that swell in business since 2008,” Puddister says, “all the time aware that to continue we would have to take what we were building and export it.” For Puddister that meant working on the business and not in it.

“I needed to look at the company from 50,000 feet.”

In 2014, Puddister led the management buy-out of Pennecon’s concrete division to form Newcrete — of which he is a major shareholder and CEO. Puddister also became an equal shareholder of the remaining divisions of Pennecon, and co-chair of the board. The company then embarked on a strategic planning process.

The CEO of the Year is chosen in conjunction with Atlantic Business Magazine’s Top 50 CEO awards. The award is presented to the individual who, in the opinion of the judges, is truly exceptional across all judging categories: corporate growth, industry leadership and community building.

Contacted via email, Paul Antle, one of seven judges for the 2016 Top 50 CEO awards, is enthusiastic about Puddister’s win. The president and CEO of Pluto Investments and a five-time Top 50 CEO award winner himself, Antle writes that Puddister came out on top in a fierce competition that began with more than 200 high calibre nominations.

“The CEO of the Year was obvious,” writes Antle. “Larry Puddister stood out. He scored extremely high in all CEO categories… being focused on growth while showing dedication to community service.”

The judges were also impressed with Puddister’s frank admission of his own short-comings and his willingness to compensate “by adding executive team members with those particular skill sets.”

When Puddister recognized that it was time to transition to “big picture” management, he admits he found it difficult personally and professionally to step back. He had to loosen his hold on the reigns. But after two years he’s confident they have the right person.

“Dave Mitchell, my CEO, sits right there,” says Puddister pointing left, “on the other side of that wall.” They graduated together and Puddister was best man at his wedding. “We both have great strengths, and we make up for each other’s gaps,” admits Puddister who manages by walking about or picking up the phone to see how a project is going. Mitchell takes a more by-the-book approach. “With Dave at my side, I believe we can do a better job together than either of us could apart.”

Larry Puddister

Atlantic Business Magazine’s 2016 Top CEO awards gala, Larry Puddister acceptance speech.

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“What bores me? A lot of things,” says Puddister. He hesitates. Repeats the question. “What is the right thing to say?” Then he sits forward. “Having nothing to do. I’m not much good at lazing around. Anyone who knows me knows I’m not much of a beach person.”

Constantine chimes in, “All-inclusive vacations? Boring. TV? Boring.”

“All true,” says Puddister and then glances at her, “You’re getting to know me pretty good.”

And what gets him excited? He doesn’t have to think. “Winning.” He laughs heartily. “Winning gets me excited. It is nice when you have a coordinated effort, you assess risks properly and at the end of the day you win a project. There are a lot of high fives and chest pumping around here when we win,” says Puddister.

He’s also grateful that at age 49 that success has provided him with an opportunity to give back. “I feel a need to give back as much as possible. A smart old lady said to me one time, ‘To whom much is given, much will be required.’”

According to Harold Mullowney, deputy mayor of Bay Bull’s and former three-time mayor, Larry Puddister personifies that axiom. Over the phone he enthuses about the CEO of the Year award. “He deserves it. Larry is an extremely deserving individual who never forgot his roots,” says Mullowney who identifies Puddister as a major force behind the Bay Bulls Regional Lifestyle Center. “The fact that Larry continues to give back speaks volumes about his character.”

He’s also respected by his industry peers. Robert Cadigan, president and CEO of Noia, says they invited Puddister to a small group of business leaders exploring deep-water prospects and strategies for local participation in the oil and gas supply chain. Pennecon’s co-chair demonstrated foresight in his contributions writes Cadigan. “Larry always looks to the future.”

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“I couldn’t tell you where this is going, but it’s gonna keep on going,”

That’s what Puddister says in response to the question of what success looks like for him. “We are going to build this into a national company. We’re diversifying across the country and have a new strategic plan that sees us with 50 per cent growth in five years, which will put us at $500 million in annual sales,” says Puddister. They recently opened an Edmonton office.

“Everybody else was moving out and we moved in.” They have projects in Ontario and are shortlisted in Saskatchewan and Manitoba.

“I don’t think the company will ever be sold,” says Puddister. “Ideally, I think, it will be employee owned. That would be a good thing because building something for themselves is what motivates people.”

We’ve been chatting for less than 40 minutes but Puddister is sitting on the edge of his chair. With the interview complete he’s on his feet and pulling on a waist-length leather jacket. “One of our guys is retiring today after 50 years. He is a good friend and I’ve known him a long time. Doug Tipton’s been managing Concrete Products and his father managed it before him. He went to work there when he was 18. I’m headed there now.”

We shake hands and he is gone. •

Feedback:
dchafe@atlanticbusinessmagazine.com
@AtlanticBus; @ABM_Editor; @wkearley; #CEOoftheYear

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