gothamculture logo

Solid leadership: Lessons in the Art of the Turnaround From U.S. Concrete

Solid leadership: Lessons In The Art Of The Turnaround From U.S. Concrete

When Bill Sandbrook took over as CEO of U.S. Concrete (NASDAQ CM: USCR) in 2011, he stepped into an organization that was hobbling out of bankruptcy and struggling to turn itself around. What he didn’t realize was just how precarious the situation really was.

A graduate of the U.S. Military Academy at West Point, Sandbrook got his start as a leader in the cavalry, serving 13 years before leaving the service in 1992 to take a job with a building materials company.

Working his way up through the ranks in this brick and mortar industry, Sandbrook found himself eventually leading a company with a P&L of $5B and supervising over 22,000 employees across North and South America. In an industry known for hiring senior executives from the native countries where the companies are owned, Sandbrook understood that his options to move to a CEO role would be limited.

But, there he was, 19 years later, facing one of the biggest challenges of his professional career.

Bill found himself at the helm of a new Board and CEO of a struggling building materials company in a down construction market. And despite getting 3 months of reprieve from creditors, banks kept knocking on the door “offering” the support of their turnaround teams.

With only 3 months of runway to turn things around, Mr. Sandbrook had to act quickly.

Sandbrook and his team knew that they had to make some pretty significant plays in short order, but they were limited in their options since the concrete business works off of backlog. Meaning, most of their near-term work was already price-locked.

Sandbrook took to the field to get a full understanding of the situation, spending upwards of 90% of his first few months in the trenches of the operation. After this assessment, several key decisions were made that helped steer the company back into the black.

Here are several key lessons we can learn from this incredible turnaround:

Empower your people to make decisions that drive the business. Sandbrook discovered a culture at U.S. Concrete where field leaders were not given the authority to make critical— or even seemingly minor—decisions. For example, gravel trucks in quarries would sit idle, awaiting a part that would cost the company only a few thousand dollars. “The quarries were producing no product and the equipment was just sitting,” Sandbrook explains. But field operations were required to go through corporate for any and every decision.

“This lack of decision-making authority in the spirit of keeping the operation running smoothly created a culture where managers just began to sit back and let corporate figure it out,” says Sandbrook.

The decision was made to immediately empower managers in the field, many of whom had both decades of experience and deep operational knowledge to make sound decisions at the local level to help drive the company’s performance.

Connect all employees to the core business. Historically, U.S. Concrete was headquartered in Houston, over 200 miles from the nearest operating facility. High office space costs and the physical disconnect from the operation created many barriers. The decision was made to relocate the headquarters to Euless, Texas right next to one of the operating facilities. This move represented significant cost savings in terms of fixed facility costs for the headquarters as well as tax credits.

Sandbrook knows that people want to be a part of a confident and winning team. “When they are, they feel more ownership, they make better decisions, they are more productive, and they enjoy their work more.” The decision to relocate headquarters reconnected the corporate employees, who had never spent time in the field, to the operations side of the business, reducing friction between the two groups.

Acknowledge what you are and what you’re not. In order to get the team working together, they had to acknowledge the fact that concrete is not a sexy business. “It’s brick and mortar work,” says Sandbrook, “we’re not a tech startup.” The employee base had to acknowledge that they were a roll-up-your-sleeves company. Pretending otherwise wouldn’t get the company back to where it needed to be.

Focus on the real stakeholders. Instead of creating a dynamic where employees were required to hold a lot of meetings and prepare endless presentations, Sandbrook did his best to minimize such behavior. “Leaders need to understand that their behavior drives cultural norms. Requiring people to spend all their time preparing and delivering presentations just make people better at giving presentations. I am not the stakeholder people need to be focused on.”

“Rather,” he continues, “we all need to be focused on our real stakeholders: our customers and our shareholders.”

As his three-month reprieve from the banks came to an end, Sandbrook and his team were able to show the start of a successful turnaround and were allowed to continue with their plan.

By his own admission, timing is everything, and the upswing in the construction market added additional wind to U.S. Concrete’s sales. Still, the economy was not the only thing driving the company’s growth from $7M EBITDA to $141M EBITDA and lifting the stock price from $2 to $65 in a few short years.

Solid leadership: Lessons In The Art Of The Turnaround From U.S. Concrete

Lessons Learned

When asked what leadership lessons helped shape his approach, Sandbrook replied, “The military provides you, as a young leader, with a structured process and approach to decision-making. Developing the ability to process multiple inputs and to make multiple decisions effectively requires leaders to work on several fronts at once.”

He goes on to explain that up-and-coming leaders should consider the following as they work to establish themselves in today’s business world.

  1. Listen more than you talk. Take the time to listen to your team. Spending the time to sit down one-on-one with your employees and hearing about their day-to-day experience can uncover some powerful insights that would otherwise never come to light.
  2. Don’t take yourself too seriously. We are all working in the best interests of the company, but oftentimes, leaders can unintentionally create a barrier between themselves and their team members if they let the power go to their head.
  3. It’s okay not to have all the answers. No one has all the answers, but that doesn’t mean you shouldn’t find them out. Even when you can’t immediately solve a problem, taking the time to show up and research a solution will help establish trust among your fellow team members.
  4. Seek out the opinions of others. Leading is a huge responsibility, but you’re not alone, and an outside perspective can help alleviate some of the pressure. Having a mentor or access to a mastermind group to help you think through tough decisions can make all the difference.
  5. Avoid managing for the short-term to serve yourself and your compensation package. In today’s business environment it’s not uncommon to see executives making decisions that positively affect business performance in the short-term in order to lock in their personal bonuses. This is problematic when trying to make decisions that are better for the business down the road.
  6. Understand the impact your title can have on others. The more senior you become in an organization, the more you must understand the impact of your words and behaviors on others. “There is really never a time when you can let your hair down,” Sandbrook explains. “Your people are always watching what you say and do.”

U.S. Concrete is not a Silicon Valley startup. They aren’t the pioneers of the latest revolutionary product that will redefine our very way of life (although they are conducting some interesting R&D in their industry). Still, they have achieved an incredible turnaround under the leadership of Bill Sandbrook.

No matter what industry you’re in or what you sell, we can all agree that leading a company through change is never an easy task. But stories like these can inspire us all to push through even the darkest of storms, and to steer the ship to calmer waters and strong tailwinds.

This article first appeared on Forbes.