December 1, 2012
By Therese Dunphy, Editor-in-Chief
Visionary leaders are often recognized for their creativity, integrity, and ability to impact others, says Mark Fernandes, chief leadership officer of Luck Companies. However, there are two additional qualities he would add to the list of important characteristics of a visionary leader: foresight and courage. All are qualities easily found in Charles S. (Charlie) Luck IV, the 2012 AggMan of the Year.
Since Luck became the president and chief executive officer of the family business in 1995, Luck Companies has expanded to include four businesses — Luck Stone, the aggregate business; Charles Luck, an architectural stone business; Har-Tru Sports, a manufacturer of clay tennis courts; and Luck Development Partners, a real estate business.
“Our organization grew from 1991 to 2000 and had record-setting growth during that period,” Luck says. “We tripled the number of employees, we tripled sales, and we improved profitability by a factor of nine.” While the business results are impressive, what is even more interesting is the company’s mission to leverage the strength of its people.
In the midst of fast-paced growth, Luck said he focused so much effort on the financial side of the business that he forgot the lesson handed down from his grandfather to his father and from his father to him: people are important, not only to the value of a business, but also to its financial success. “We had lost sight of these fundamental beliefs,” Luck says.
Another side effect to rapid corporate growth was a leadership team, comprised of 12 executives, that wasn’t working very well together. “We were setting fantastic goals and hitting new records on the financial side,” Luck recalls. “But we were not working as well as we could as a team.”
To realign its mission and values, the company turned to San Antonio-based Holt Development Services. Through the implementation of values based leadership, the executive team learned to work more effectively and productively. Values based leadership is a methodology that challenges organizations to develop a mission, set of values, and leadership point of view, and then identify the goals of the culture and its embedded processes, models, tools, and rituals.
“We really learned about leadership and unlocking the performance of people; that’s really at the core of what we believe,” Luck says. “Yes, we need to have efficient screens and productive mobile equipment, but most of the industry has access to all the same equipment. What I don’t believe we do is access the potential of the people who are on our payrolls today to the level they can be unlocked.”
Developing internal potential
To tap into the potential of its personnel, Luck says the company’s leadership team began by working on themselves first. “Looking in the mirror and looking at yourself and your leadership is probably one of the most humbling experiences I’ve ever had in my life,” he says, noting that he also sought out the opinion of others and asked what they liked and didn’t like about his leadership. He used what he learned to hone his skills and modeled his growing self-awareness for others.
The executive team met quarterly for two-day sessions during the first 18 months it implemented values based leadership. They began to align the corporate mission and work together more effectively. Soon, the rest of the Luck team could see a difference. Throughout a two-year timeframe, other executives, managers, and front-line associates also were trained in values based leadership.
Through the process, four core values — leadership, integrity, commitment, and creativity — were identified. “Underneath each of those words, which are commonplace words and ones you would expect to find on the wall of any corporate boardroom, we’ve gone through great pains to describe the outcome statement and behaviors of each of those,” Luck says. “The values set the expectation for how we conduct the business.” The mission statement was also written: We will ignite human potential through values based leadership and positively impact the lives of others around the world.
“Our employees started to tell us this was the most effective block of work they’d ever been exposed to in the 90-year history of our company,” Luck says. “We had wives and husbands who would call us and say, ‘What you’re doing with the values based leadership training is having a huge impact on our life and on our children.’ Customers began to notice a difference, and they began to remark on it.”
Putting leadership into action
Luck Companies enjoyed a number of early successes through the implementation of values based leadership, including completing acquisitions when competitors did not. The key, Luck says, was using the training and tools to impact not only their own behavior, but to assess what was important to the people on the other end of the transaction.
“This work continued to snowball. We’ve increased the amount of funding every year. We’ve increased the amount of training every year. And then, the recession came,” Luck notes. “Some of our doubting associates said, ‘Wait until the economy gets bad. They’ll stop doing this values based leadership in a minute.’”
But that prediction never came to pass. Instead, Luck says, the company used its values and mission more than ever. For the first time in its history, Luck Companies — like many businesses — had a reduction in force (RIF), which impacted18 percent of its work force. “We said that every one of our decisions and how we work with our associates has to reflect, at the highest level, the use of our values, our leadership, our training,” Luck says. “How we went about it was a testimony to values based leadership.”
Luck Companies communicated frankly and transparently with associates about why the RIF was necessary. It set up a separate office off site for displaced associates. Workers were given assistance with creating resumes and posting them to job placement sites, and the office was kept open until every associate either had a job or said they no longer required assistance.
Values based leadership also transformed how Luck Stone approaches zoning and permitting issues. Traditionally, the company identified potential reserves, talked to the homeowner, drilled samples, and met with supervisors to gauge support. If supervisors supported site development, Luck Stone would move as quickly as possible to the application process. Today, it continues to identify and verify reserves and work with homeowners, however, it now seeks community involvement through feedback sessions and dialogue. It assesses community goals and concerns before proceeding.
“We do all of that work, which, at times, can take years, before we go to zoning and permitting hearings,” Luck says. “What we have found is that we have been much more warmly received. People find us much more transparent, much more honest. We’ve used creativity in the process of addressing their concerns. We’ve used leadership. We’ve shown them that we have high integrity and commitment. We did not do that before we had our values so clearly articulated.”
Measuring the results
While some skeptics may question whether a people-based focus can truly impact the bottom line, Luck Companies regularly sees the results of its values based leadership focus.
“It is very well researched and documented that — when you have a leader who has high leadership skills, high clarity around their values, and people who work in alignment with that — the performance of the team will be at least 10 to 20 percent higher than a team that’s not aligned and not well led,” Luck says. “What happens is that associates are happy at work, they are engaged in their work, they innovate, and they take better care of customers.”
Many companies have a number of million-dollar ideas that are dormant within their people, he says. Associates don’t bring them forward because they don’t feel that they are supported or that leadership is open to their ideas. “What we have seen is that when you put leadership in place that opens up the culture, opens up communication, and provides trust, associates’ engagement and enablement increases,” he says. “On a daily, monthly, yearly basis, there are thousands of things that have been improved — starting on the front lines — that have had a dramatic impact on the company.”
Expanding the impact
During recent years, Luck Companies has been taking its message about value based leadership outside the walls of its own companies. In October 2011, it held a leadership symposium in Washington, D.C. Further events are planned for AGG1 in San Antonio on March 18, 2013; in New York City in 2014; and in an international venue in 2015. Executives have also been busy with public speaking and education about values based leadership. They have completed approximately 250 speaking engagements before more than 20,000 people.
Luck Companies also has worked with the Hay Group, a management consulting company that collaborates with such powerhouses as Disney and Toyota and partners with Fortune magazine to develop its “The World’s Most Admired Companies” list. The Hay Group typically publishes 10 white papers on a variety of management topics each year. It is currently working with Luck Companies to develop a white paper on employee engagement.
“We’ve been evaluated by them for three years in a row now,” Luck says. “Our scores clearly show that we have world-class enablement and engagement with our associates. We are among the top 10 percent in the world.”
The Hay Group is not the only one paying attention. Professors from the Virginia Commonwealth University published a case study about Luck Companies in one of its prominent textbooks for strategy entitled Strategic Management Concepts: Competitiveness and Globalization, by Hitt, Ireland, and Hoskisson.
Further, Andrew O’Connell, senior associate editor of the Harvard Business Review, recently completed an article on emotional labor that features Luck Companies. Its publication is pending.
Each report furthers Luck Companies’ mission to share its message of values based leadership. Luck says that it is his goal for Luck Companies to be recognized as a global leader in values based leadership by 2015.
“To have the foresight to see both the need and the opportunity is extraordinary,” Fernandes says of Luck’s advocacy of values based leadership. He was particularly impressed with Luck’s courage in the face of early skeptics. “All human beings have a mission in life to carry out. This is Charlie’s mission. It’s his authentic place.”