Best Managed Companies

How thinking long-term made Hatch one of Canada’s Best Managed Companies

Faced with a global financial crisis, engineering and construction firm Hatch revolutionized its business without losing focus on its people

Canada’s Best Managed Companies
Hatch workers preparing a major underground wastewater pipe

Hatch workers preparing a major underground wastewater pipe. (Gabby Frank)

It’s a tale seldom told: A First Nation community teams up with an energy company to push forward an industrial project on their land. But in the fall of 2014, Calgary-based AltaGas launched the Forrest Kerr Hydroelectric Project in partnership with the Tahltan First Nation in Northern British Columbia, producing electricity to power 70,000 homes in the region and generating $1.1 million annually for the aboriginal community.

Quietly toiling behind the scenes to make the deal happen was Hatch, a professional services firm based in Mississauga, Ont. that offers consulting, engineering, construction and project management services to the mining and energy sectors.

Indeed, the Forrest Kerr project is a testament to Hatch’s evolution—a significant milestone for the 61-year-old company that began as a small engineering firm. President and CEO John Bianchini points to 2008 as the starting point for the firm’s new journey: The mining and energy sectors were nearing their cycle lows just as the financial crisis hit. Meanwhile, warnings about climate change were growing, and First Nation groups were expressing concern about how environmental fluctuations would affect their communities. “We had all these things combined to dramatically change our customers’ business, and it really gave us a challenge,” says Bianchini, who’s been with the company since 1985 and became CEO in 2012. “Our clients were demanding new skills, new ideas, new products, new services. We’ve had to rethink our entire business in what we’re calling the new era of Hatch.”

Bianchini says this new era is characterized by putting a stronger emphasis on community engagement and environmental sustainability while assisting clients with capital generation and digital solutions. Hatch Digital helps clients extract meaning out of the mounds of data they collect so they can make better informed decisions. Meanwhile, Hatch Investments connects clients with funders, such as governments and private equity firms.

The company made these shifts in its business strategy not through mass staff turnover but by moving current employees into new leadership positions. “We did make a strategic hire or two to augment our existing expertise,” says Glenn Sakaki, global director of marketing and communications, “but our culture is one where leadership continually changes roles anyway. That way, everyone remains very much aware of our clients’ evolving needs.”

Maintaining employee morale while making significant overhauls to a business’s framework can be a challenge. But Hatch earned its spot on the list of Canada’s Best Managed Companies by recognizing that worker engagement is directly tethered to both long-term vitality of the firm and client satisfaction. “Frankly, we wouldn’t have any credibility in helping them manage their businesses if we couldn’t manage our own,” Bianchini says.

The company’s commitment to staff engagement starts well before an employee is even hired. Over the years, Hatch has forged strong relationships with leading engineering programs worldwide to recruit top talent straight from university. Hatch also sponsors 200-plus scholarships at high-ranking schools. “This helps us build our brand within these institutions and attract the best of the best,” says Bianchini. In any given year, Hatch will snap up between 500 and 700 new grads.

In the past decade, Hatch implemented a dedicated Young Professionals (YP) program that guides recent grads through their first three years with the company. Roughly 70% of the program involves on-the-job training, but there are also networking events and in-class education for engineering, leadership and business skills.

Selma Akel is a member of the program who was recruited by Hatch while still in university. Akel has lunch with a mentor every month to discuss work goals and life in general. “It’s nice to have someone who went through what you’re going through,” Akel says. “I’m new to [Toronto], too, so it’s nice to have that community with the other YPs and my mentor at work—I felt like I had friends from the very beginning.”

While the program wasn’t formally in place when Bruce MacKay was hired in 1989, he has also benefited from the company’s culture of mentorship and management’s tendency to throw juniors headfirst into big projects. Now the regional managing director for Western North America, MacKay recalls one instance where the senior lead on the assessment of a large metallurgical furnace left the project suddenly and dropped the assignment on MacKay’s desk—even though he was just over a year into the job. “Anyone who’s done this knows these studies are typically done by senior engineers who have seen a lot of furnaces,” says MacKay. “But we went out on a weekend, and I learned how to do it.” After collecting data and getting the sign-off from a senior executive, Bert Wasmund, MacKay created a series of slides for a meeting with the client. “Bert gave me the slides and said, ‘OK, Bruce, present this.’ I looked at him in shock. Everybody thought that was the plan, except for me,” says MacKay. “That was the first turning point in my career,” he adds.

Bianchini says offering challenging work is a key tool for holding onto skilled employees. “Smart people want to work on challenging and different tasks,” he says. In fact, that’s the main reason MacKay has stuck around so long. In his 27 years with Hatch, he’s lived in five cities and held positions ranging from technical engineer to client interface personnel to business executive. “I could have left Hatch to do some of these different things,” he says, “but the simple fact is I didn’t need to leave—I’ve had many different careers. They just all happen to let me keep the same employee number.”

Perhaps a more obvious incentive for sticking with Hatch is the opportunity to own shares in the business. Company ownership is offered to mid- and senior-level employees who Bianchini describes as “entrepreneurs with a technical soul.” Being employee-owned also means Hatch doesn’t have to appease shareholders on a quarterly basis, allowing management to plan for the long term. For MacKay, who’s owned shares since 1995, the best feature of the program is that it encourages employees to stop worrying about the best interests of their division and to focus on the company as a whole. “It doesn’t matter if you’re in energy or metals or infrastructure or finance—it’s one share with one calculated return on that share,” he says.

Another quality Bianchini looks for in employee shareholders is an ability to approach leadership with a global perspective. At any given time, Hatch is juggling over $50 billion worth of projects in more than 150 countries. Globalization has been creating opportunities for Hatch since the late 1990s, when the Chinese government and others started hiring Hatch to undertake infrastructure building and resource extraction projects. “That created a big, big change in our company,” says Bianchini. “That’s when we started looking after very large projects and many at a time.” Before then, Hatch was thankful to have one or two billion-dollar jobs on the go at once; by the mid-2000s, it wasn’t unusual for the company to be juggling 20 or 30.

As it moves into the next phase, Hatch is focused less on scale of individual projects and more on making sure it aligns with the social and environmental values of the communities those projects affect. That’s what makes initiatives like the Forrest Kerr hydro project so important. “We talk about inflection points in this business,” says Bianchini, “and certainly we’re experiencing one now—socially and culturally. That’s forcing us to adapt extensively so we remain relevant and the best company we can be.”