You can tell by its name that CH2M Hill, an engineering, design and construction firm based outside of Denver, is not a company driven by marketing. Indeed, there’s not much that’s glamorous about CH2M Hill, except for the list of mega projects around the world that it is overseeing—the 2012 London Olympics, the expansion of the Panama Canal and Masdar City, the zero-carbon, zero-waste new city being built in Abu Dhabi. These guys—and gals, because women hold some top management posts—know how to get big jobs done. You can read my profile of CH2M Hill in the current issue of FORTUNE. It’s the first of a series of profiles of FORTUNE 500 companies that I’ll be doing for the magazine during the rest of 2009.
As interesting as what the people of CH2M Hill do is how they do it. CH2M Hill is an employee-owned company with solid values shaped by its founders, who were all World War II veterans, and so it aims to be sustainable in the broadest sense of the word.
CH2M Hill is increasingly turning the world’s environmental problems into business opportunities. The London Olympics will be the most sustainable Olympics ever. Its renewable energy business is hot. The company’s core strength is in water, so it is building water reclamation and desalination projects in places like Singapore and Australia. It’s rebuilding London’s sewers and the Mumbai airport.
The company generated $5.6 billion in revenues last year, and it’s growing. As the world becomes more urban, the demand for clean water, sewers, clean energy and mass transit is bound to increase. As Tom Searle, the president of CH2M Hill International, told me: “The third world wants to become the first world. People as they get richer won’t tolerate pollution. They won’t tolerate poor quality water.”
Now, about that name and the culture it spawned: In the late 1930s, three Oregon State engineering students—Holly Cornell, Jim Howland and Burke Hayes –fell under the sway of a charismatic, British-born professor named Fred Merryfield. After grad school, all four served overseas doing engineering-related work during the war; they formed the company, lining up their initials in the order that they returned from the war. Howland and Hayes became H2, and Hill was added later.
Howland led CH2M Hill as president, general manager and then chairman for nearly 30 years, staying close to the firm until his death last August at 92. His ideas about management shaped the culture, particularly after he encapsulated them in a pocket-sized booklet called the Little Yellow Book that is given to every CH2M Hill employee. It’s been translated into Spanish, French, Russian, Arabic and Chinese. Some excerpts:
Avoid position perks such as parking spaces reserved for individuals, thick rugs, swivel thrones, and oversized offices. Smaller offices and more conference rooms provide better use of space.
Administrative help is important. However, private secretaries, as generally used, are expensive and insulate their bosses from both the people working with them and the clients…neither desirable ends.
The 5-minute speech will win over the longer variety. Few points are made or souls saved after the first 5 minutes of a monologue.
Let’s everybody be generous. It is especially important that those at or near the top of the heap be willing to spread the returns in dollars and recognition around. The gymnast on top is dependent on all those solid people who support him.
Admit your own mistakes openly and in good humor. Everybody will feel better!
This kind of plain talk might not inspire Wall Street traders or Hollywood agents but it works for CH2M Hill, where to this day there are no reserved parking spots and everyone eats in the company cafeteria. “Jerks don’t do well here,” a company executive told me.
Here’s a link to my FORTUNE story, and a few photos of the company’s work–the London Olympics site, a water treatment plant in Brisbane, Australia, and an Xcel gas-fired power plant in Minnesota that replaced and older, dirtier coal plant.