In 1964, Jack Lowe Jr. joined TDIndustries, his father’s mechanical construction and facilities services business, in Dallas, Texas. Despite possible stereotypes of what a Texas-based construction company might have been like in the mid-’60s, Lowe Jr. walked into a very conscious and intentional culture that had been created under the direction of Jack Lowe Sr., who had successfully pioneered a new way of running his business known as servant leadership (a term coined by Robert K. Greenleaf). Using this same style of leadership when Lowe Jr. took over TDIndustries as CEO in 1980, the company made it through a major economic downturn (which they were the only major contractor in Texas to survive), scaled at an impressive rate, and accrued accolades, including being recognized on Fortune’s list of the 100 Best Companies to Work For every year since the list’s inception. We spoke with Lowe Jr. about how servant leadership works, the challenges associated with its adoption, and how building trust can save a company.
What is your personal definition of servant leadership?
Jack Lowe: The role of a leader is to serve those being led. Our simple definition is that you help those around you grow.
Can you tell us about the evolution of servant leadership for you?
JL: My dad started TDIndustries in 1946, and in the late ’60s we were pretty small — around 300 people — and we would promote people to leadership roles but they were not succeeding, and there was a lot of unrest. My dad stumbled across this pamphlet on servant leadership that was actually written for college students, who of course were protesting on campuses around the country at that time.
After reading the pamphlet, my dad decided to invite about 15 employees at a time over to my mother’s house. They represented a cross section of the company, and no one’s immediate supervisor would be there. The pamphlet would be there, and they would spend an hour or two talking about it during these seven-hour sessions.
The reason he did this, and what he had discovered, was that you can promote a plumber to be a plumbing foreman, or a salesperson to be a sales manager, or an accountant to be an accounting manager, and all of these people have tons of technical capabilities and tons of training in their technical skill, but none of them have had any training in leadership.
"Plumbing and engineering are complicated, but they’re not as complicated as people. My dad realized that we needed to figure out some way to help people be better leaders."
At first we thought servant leadership was mostly just being nice to each other, but now we know that some accountability needs to be built in, as well. Now we’d say that the definition of a servant leader is somebody who influences others; whether you supervise others or not, if you influence others, you’re a leader.
Can you give us an example of servant leadership in practice?
JL: Servant leadership builds trust. If people think you’re helping them grow, then they like you and trust you. Trust allows you to do all kinds of things, like navigate difficult situations and change strategic direction. If you don’t have trust, you can’t do much of anything.
Probably the best example of this happened in the late ’80s, when the construction business in Texas collapsed. Our revenue and our net worth declined by half, and we were in a desperate situation. We had a defined benefit retirement plan where you would get one percent of your salary for every year that you worked for us when you retired. So if you made $100,000 and you worked for us for 40 years, you’d get $40,000 a year for the rest of your life upon retirement.
Usually these types of pension plans are underfunded, but ours was overfunded by a million dollars, which is very rare. But the only way to get that extra million dollars was to terminate the retirement plan. The good news was that the company would get that $1 million and we would distribute the other $4 million that was in the plan to the employees. The problem was that I didn’t think we could make it with just $1 million; I thought we needed two. But it was the employees’ money; I couldn’t make them give it up.
So we brought the employees together and we came up with a plan. I met with just about everybody in the company over the next few weeks. I told them no one would know who had agreed to give up some of their retirement money and who hadn’t, and nobody’s job would be on the line, but the company needed their help. And we were able to raise over a million dollars and saved the company. That was built on trust.
What are some of the other benefits that servant leadership has had for TDIndustries?
JL: We have been able to grow more because we have better leaders. Plus, we can attract talent because people want to work for us; we’re known as a great place to work, and we have
that reputation because of our servant leadership practices. We’ve also got great partners who refer good people to us because of our good reputation. It’s only because we have a lot of good people who are capable of stepping up into leadership roles that we can grow.
Are there any challenges that you’ve faced in implementing this leadership style?
JL: Yes, we’ve terminated very profitable senior executives who just aren’t right for the way we do things. Those are hard decisions to make, but if you’re not growing people, even if you’re very profitable, we’ll let you go. We terminated one of our most profitable business unit’s managers about five years ago because he was just chewing people up. That’s not OK with us.
What advice do you have for someone who might be thinking about implementing servant leadership at their company?
JL: The good news about servant leadership is that it works. It will really help you as a businessperson. It’s harder than just being an autocrat, but it works better. If your goal is to be part of an organization that thrives and succeeds, I believe something like this is the best way to do it.