BC Business
Tom Leavitt
President and CEO, Leavitt Machinery
Most of us have had those moments—sitting in our office with the door closed, frustrated by our bosses, the office politics, the bureaucracy—when we’ve thought, “If only I were running this business—things would be different.” Few of us, however, have the chance to seize on that thought and take the bull by the horns.
Tom Leavitt did. In 2001, after a decade as general manager of Finning Canada’s materials handling division (forklifts and the like), Leavitt brought a list of changes to the president of the company that he thought were essential to the continued prosperity of the division. “I said, ‘If we’re willing to make those changes, this would be a really great business. And if you’re not willing to make those changes, you should sell it,’” he recalls. Within short order, Finning came back to their GM and told him to make them an offer; months later, a deal was struck for $68 million (the approximate annual revenues of the division) and Leavitt Machinery was born.
Some of the changes that Leavitt had been seeking were tactical in nature: a more competitive contract with the union and the ability to sell multiple brands (Finning, as Western Canada’s authorized Caterpillar dealer, was squeamish about selling other brands). But above all else, what he wanted was to institute a more open corporate culture—something that he passionately believes his new company embodies.
“Our culture at Leavitt is one where we’re all concerned about the company and the bottom line—and most people who come from other businesses, they have no idea about profitability, they have no idea about how much equity is in the business, how much debt, they have no idea what the net profit after tax is,” says the 58-year-old father of five. “There are so many things they don’t know, and we share that with all our top guys so that everybody knows what’s happening financially within the company.”
That culture of transparency appears to be paying off. Since 2001, revenues have increased almost five-fold, with projected sales of $300 million in 2014. One of the things that has allowed Leavitt to grow, in economic times both good and bad, is an innovative approach to fleet management—in essence, moving beyond just selling forklifts to managing all aspects of a client’s materials handling. “If you own a sawmill, I supply all the forklifts and all the maintenance,” explains Leavitt. “I guarantee the repair time and the uptime, and swap out machines when they get older. I fix your operating costs.”
Leavitt’s operations remain anchored in Western Canada and the Pacific Northwest, but the CEO (and 100 per cent owner) says the company is “evolving away from a model that’s constrained by territory,” with a burgeoning e-commerce business that trades in everything from new and used equipment to parts. “Last year we picked up $20 million in online sales from new customers who came to us unsolicited,” he notes.
The move to diversify will become increasingly important as the Alberta economy—which represents almost 60 per cent of his business—eventually, and inevitably, slows. “Fort McMurray, Edmonton: that part of the country is driving everything in Canada, and if that were to implode—if the price of oil were to come down—that would have a marked effect over a two- or three-year period on our company. But we’re growing outside of Canada, and our plan is to keep doing that.” —Matt O’Grady