Hardhat utopia

Sixties social theory meets the building trade at Dallas contractor TDIndustries -- and it works

With a satisfied smile, Jack Lowe Jr. works his way through the nest of cubicles at TDIndustries, a Dallas-based plumbing and air-conditioning contractor where he serves as chairman and chief executive officer. Lowe, dressed casually in an open-collar shirt, walks at a leisurely pace, stopping several times to greet employees, all of whom sport blue and white plastic nametags.

He makes a detour into the company kitchen, personally retrieving a glass of cold water for his visitor. Lowe then gestures toward his office suite, positioning himself so he can catch the reaction to his executive accommodations.

"You like my office?" he asks, grinning, as he surveys a space most corporate chieftains would consider suitable for a large cloakroom.

Then the top executive plops his lanky frame into a puny swivel chair. He shares his office with his assistant, Anne Reese, and both conduct their business at the same standard-issue, unadorned metal desks.

Cloth-covered partitions separate Lowe and his next-door neighbors--field superintendents--but do little to muffle the noise from the other side. As Lowe settles down to talk about the employee-owned company his father founded in 1946, which now brings in $135 million a year in revenues, he must compete with the shrill ring of a field superintendent's cellular phone. The nearby employees, in turn, could easily eavesdrop on him.

"We don't have many secrets," Lowe says.
The TDIndustries chairman's unpretentious digs reflect a conscious effort by Lowe--following his father's path--to create a somewhat touchy-feely, outwardly democratic but profitable business in the highly competitive Dallas commercial construction industry.

TDIndustries ranks as the largest contracting firm in Dallas specializing in air-conditioning and plumbing for commercial buildings. It can claim responsibility for the mechanical infrastructure of such high-profile edifices as the Dallas Convention Center, The Ballpark in Arlington, and J.C. Penney's headquarters in Plano, as well as many of the glass boxes along Central Expressway.

It is a thriving company. After surviving a regional downturn in construction in the late '80s, TDIndustries' revenues have steadily climbed this decade, with $163 million projected for 1999. Worker ranks have swelled to 1,038 employees, and the company's market share dwarfs that of its competitors.

But TDIndustries is also an unusual Dallas corporation, a place where executives wax philosophical to an almost all-nonunion work force of plumbers, sheet metal workers, pipe fitters, and welders about such feel-good concepts as ethics, integrity, trust, and even love.

Something of a secret in Dallas, TDIndustries has rarely received attention in the local press. But last month Fortune editors featured TDIndustries on the magazine's cover as the second-best company in the country to work for. TDIndustries ranked behind only Synovus Financial, a Georgia-based outfit, but rated above such well-known, worker-friendly places as Southwest Airlines, the investment bank Goldman Sachs, and computer giant Hewlett-Packard.

In the cynical '90s, an era of downsizing and disloyalty, how has Lowe managed to nurture a workplace where more than a dozen employees approached at random volunteer how happy they are with their jobs and how they're committed to their employers? And how, in an industry as unstable as the construction business, does TDIndustries keep its annual turnover rate at 13 percent for employees who have been there at least a year?

Either there's something to learn from TDIndustries' success, or it's just too good to be true.

Mike Fitzpatrick, the chief financial officer at TDIndustries, says he received a telephone call recently from an Oregon construction company executive who'd spotted the Fortune story. "Do you guys franchise?" the executive wanted to know. "Or could you buy us?"

Fitzpatrick told the caller no, and no. Then he explained that there's no wizardry to the company's culture. "It's not magic," he said. "It's just a lot of hard work, and it gets down to the people themselves."

The company does, however, possess a peculiar corporate structure. Imagine if workers had the power to fire their bosses. At TDIndustries, the Employee Stock Ownership Plan (ESOP) gives non-management workers almost 75 percent of the closely held company's voting stock. That means blue-collar workers not only get a share of the profits, but--in contrast to most ESOPs--also have the muscle to boot Lowe and his entire board of directors.

"It's not easy," Lowe says, "but there is a way to do it." The workers would have to organize and nominate a slate of five or more board directors for the annually scheduled election and then succeed in getting 50 percent or more of the votes behind their ticket.

The company also has adopted an unusual philosophical mission. More than 25 years ago, Lowe's father, Jack Lowe Sr., began incorporating management guru Robert Greenleaf's ideas into the company training program. Greenleaf, a former AT&T personnel executive, wrote an essay called "The Servant as Leader" in the late '60s. Having spent a lot of time talking to college kids in the era of student protests, Greenleaf advocated theories that in most companies would cause mayhem. His basic message: Allow the grunts to run the show.

In his essay, Greenleaf makes his main point with a story borrowed from German novelist Hermann Hesse, author of Steppenwolf, Siddhartha, and Magister Ludi. In Journey to the East, Hesse writes about a character named Leo who accompanies a group on a journey and performs only menial chores, yet buoys the travelers with his goodwill. When he disappears, the others can't continue. That's because Leo, the servant, was in reality the leader, the guiding spirit.

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