By Ray Penner
It’s a story Jim Yuel loves to tell. He starts by going back to the darkest days of winter – and one of his darkest days in business.
It was between Christmas and New Year’s in 1983. Jim’s fledgling company, Prairie Industrial Chemicals, had come through some tough times in ’82, but was rebounding nicely. Then the banker walked into Jim’s office and presented him with a letter. “Effective immediately,” the company’s line of credit was cut from $1 million to $750,000. “That means,” said the banker, “that starting tomorrow any cheque of yours will bounce unless you get your line down to the new limit.”
Jim was not too happy about that, and was blunt in his reply. Heated negotiation ensued until the bank agreed to give Jim 17 days to come up with $250,000 to pay down his loan.
“We went at it hard, and we did it,” Jim will tell you. “You’d think that would be enough, right?” Five months later, just as Jim and his wife, Doris, were packing for their family’s summer vacation, another letter from the bank arrived, this time saying it had “lost confidence in the management of the company” and no longer wanted the account. Jim had just 90 days to prepare financial statements and find a new lender.
By this time, the company had in fact continued to improve. Jim was justifiably optimistic about its future, but no bank he went to shared his confidence. “Fortunately,” Jim says, “our accountant
talked to a banker he knew and got him to come to my plant and talk to me. This time the banker understood the path we were taking and agreed to take us on once the 90 days were up with the [other bank].”
That “other bank” also began to notice the company’s turnaround. By this time, Prairie Industrial Chemicals’ amount owing on its line of credit was less than half the new limit. The company had no longterm debt. In fact, this was going to be the company’s best year-end ever, with even brighter days ahead.
Just two weeks before the 90 days were up, Jim received a third letter from his now enlightened but soon-to-be-former bank. The newest missive apologized for the previous letter, and magnanimously stated the bank would be pleased to retain his business.
Jim relishes the memory of that moment. “I took out a piece of paper and calmly,politely wrote to the bank’s senior vice-president: ‘Dear sir. Your offer is lovely, but unfortunately I have lost confidence in your management and thus will no longer be able to continue our relationship…” Like virtually every successful entrepreneur, Jim knows those tense times that keep you up at night. Jim, however, was always emboldened by those challenges to his ambitions. As an employee at a Saskatoon chemical plant, he was convinced he could capture a good chunk of the prairie market simply by providing the same products, but with better service and a competitive price. Thus, Prairie Industrial Chemicals was born in 1976, with its target market being the hundreds of prairie municipalities demanding a continual supply of water treatment chemicals for their drinking water and swimming pools.
From Monday to Wednesday night, Jim would be making sales calls on the road through Lloydminster to Edmonton, then to Red Deer and back to Saskatoon – or to Prince Albert, Nipawin, the Pas, Yorkton, and back. First thing Thursday morning, he and Doris would be in their modest warehouse, “breaking bulk” to fill the chemical orders. They’d load the truck and on Friday morning he’d be back on the same circuit to deliver the promised orders. Late Saturday night, sometimes Sunday morning, he’d be back home. On Monday, the routine began again.
Word spread. Here was a supplier you could trust to deliver an absolutely essential commodity to provide your community with safe potable water and other products. All the time, driving in that truck, Jim kept thinking bigger, formulating the next step on the highway to success.
One of Jim’s passions has always been hunting, whether the big game was a bull elk or a company poor in resources but rich in potential.
By 1980, the company had surpassed $5 million in sales. Jim continued to diversify, concentrating on the acquisition of companies he needed for his business, such as a manufacturing facility, packaging plant, and trucking outfit. By 2006, when Jim’s son Greg took over as president, the company, now called PIC Investment Group, had evolved into a multi-corporate enterprise. Today, PIC has over $350 million in aggregated revenue between its nine operating companies plus equity interests in 21 other businesses.
One of Jim’s passions has always been hunting, whether the big game was a bull elk or a company poor in resources but rich in potential. Throughout his life, he became exceptionally skilled at bagging both kinds of prey, driven by the adrenalin of the chase. He readily admits that “Once a new acquisition is successful, though, once it’s stable, it’s boring.” He was never hesitant about handing over a solid enterprise to someone else to run it, so he could be off on a new hunt. “That’s why I had no remorse about handing over the keys to Greg,” adds Jim. “I’ve been walking away from businesses my whole career.”
Herein is one of the Yuels’ key principles of growing your business – of going beyond that plateau (Jim puts it at $5 million in gross sales) to reach the next level. It’s a strategy of “divide and conquer.” By 1990, he realized he could not continue to be so involved in community work and simultaneously drive the daily operations of his five companies. In those days, the common refrain regarding any major decision became Where’s Jim? He decided to restructure operations so that each business would be run independently.
This leads to Jim’s second key principle: Find the right people to run those businesses. It was not just luck that Jim was able to attract and retain remarkably talented and unquestionably loyal managers. “They were given the opportunity to acquire significant equity. Just as importantly, I wanted them to know they made a difference, that they were in control,” Jim explains.
“The culture of your company starts from the top,” says Jim, which also explains why many of the employees under the PIC umbrella have remained loyal. “First of all, me demonstrating the values I wanted in my companies made it easy for my senior managers to do the same.” One of those values was transparency with employees. In 1985, Jim presented all employees with a personally hand-written report on the business, including financial information to indicate how the company had done in the past year and where it intended to go.
“That was pretty unusual for a private company,” says Jim, “but I think it went a long way to build employee confidence in our integrity. Too many business owners forget that even if you don’t tell your employees you’re rich, they’re going to think you are anyway. I never had any problem telling them if we had performed well, because if we weren’t doing well, they’d want to know that, too.” There was profit sharing, and Jim went to great lengths to explain how the profit-sharing amount was determined and what happened to the rest of the profits. “I wanted them to know that I wasn’t just pocketing the rest, that if the company built a plant in Corman Park, it had to be paid for with those profits. They all understood what I was saying. I don’t ever recall any employee telling me they felt they thought they deserved more or were being cheated.”
Today, the commitment to transparency continues, albeit in a much more elaborate document, one that is there for everyone to see on the PIC website. Jim continues, “I always had the policy of putting people in charge and getting out of their way. I wasn’t looking over their shoulder. I wanted them to know it was OK to make a mistake, even a big mistake – once. But if you make the same mistake twice, it means you didn’t learn anything the first time, and now we’ve got a problem. Otherwise, you make the decision and chart your path. I like to think everyone who worked for us felt they were in control, irrespective of their position. That was always company policy, and I think our people thought it was important. They knew they were free to try to do things better or differently. I liked to say that I don’t care if you go around a hill or over top of it, just as long as you get to the other side.”
While there was plenty of tolerance for people who saw things the same way as Jim, he never had time for people who were “full of bluster but no substance.” It was usually easy to detect, either at the hiring stage or on the job, whether people were truly committed to walking the talk. If not, it was a short walk out the door. There was only one instance where Jim admittedly made a mistake with a senior position and should have let the person go years before he actually did. “I kept thinking they might turn around, but that never happened.
Of all the employees and management who were invited to the big event to celebrate Greg’s succession in the company, that person was the only one who didn’t show up.” Jim smiles, “He was gone soon after that.” Tough, but fair. More than a few people who know Jim Yuel would describe him that way. He, though, would add “empathetic” when it comes to employees. He has walked in their shoes as an employee at a chemical plant. “We’d get wind that the top brass was coming for a tour. On the big day, we’d be quaking in our boots during that 45 seconds when they’d walk past our station. I worried that they might spot something wrong, and fire me on the spot. I realized years later that they never would have done something like that to an employee. As the resident of a company, neither would I. That’s why I always tried to show any employee I met that I was interested in them, and I would thank them for being with us.”
Now in his retirement years, Jim has more time for hunting, fishing, and golfing. He also finds time to mentor a young entrepreneur once a month. What’s the first and most important advice for young entrepreneurs? Jim doesn’t hesitate, “Find yourself a young, exceptional lawyer and a young, exceptional accountant who think like you do and want to build their reputation alongside your business.” Jim has had the same accountant and lawyer for decades and, “over the years, both of those guys have paid me back multiple times for every dollar I ever spent on them.” Find quality people who share your values. Value them in turn. Like the rings of a tree, if you remain as uncompromising and as straightforward as Jim Yuel, your success will grow. He still keeps that last letter from “the other bank” in his desk drawer.
Gentlemen, place your bets.
Noon on Father’s Day. Greg had just gotten off the plane after a gruelling week of meetings – as many as seven in one day. It’s the price you pay when you triple the size of the business in a short time. But he’d made the commitment to be interviewed, and did so happily, indeed enthusiastically. The idea of talking about the business and his dad (who was interviewed earlier that day) was “energizing.”
It had not been a secret to anyone at any of the PIC companies that Greg would be taking over the reins. He started doing odd jobs at the company when he was 12. He spent his high school summers driving a forklift. Between university sessions in the ’90s, he took on key roles such as meticulously unravelling the mounting set of new transportation and hazardous product regulations. He is a master at reading legal contracts, at clarifying the details. After getting his BA degree, Greg moved to Edmonton to work under one of the leading PIC managers at Caron Transport. When he came back to Saskatoon after seven years, Jim could see the difference. Greg was well on his way to taking over, but on his own terms, in his own way.
In many respects, Greg is not “just like the old man.” Indeed, if there’s one thing employees and others need to understand about succession from an entrepreneur to the next generation, it’s that the last thing you want is someone with the same skills and mindset as their predecessor.
That doesn’t diminish in the least Greg’s effusive admiration for his father. “Dad has fantastic vision. He’s extremely creative.” He adds, “I never took it for granted that someday I would be in my dad’s shoes, but from the age of six, that was my ambition.” Whether on the road with his father, working at his summer job at the plant, or just listening to his parents talk about the business, it was a constant mentorship. “I remember times when urgent decisions had to be made. I admired how my father would take charge and make those decisions. He was ‘that guy,’ and I wanted to be that guy too.”
It was his father who taught Greg the moral principle of “win-win-win” when making business deals, especially acquisitions. “My dad would never use his money or experience to take unfair advantage of those in a weaker bargaining position. There were many times when he actually suggested terms that were better for the other guy than what was on the table, just so both sides would benefit more.”
Do Jim and Greg ever argue? “Oh yes!” exclaims Greg, “but we do not fight. There were times we’d have very heated arguments about what should be done or the direction we should take, and sometimes it didn’t matter who was around the table. We’d go at it, say, at a management meeting, and then I would look around, and there would be these shocked faces of our managers, who were wondering which of the two of us was going to come out on top. When I think about it, it’s hilarious.”
What’s the biggest difference between father and son, reflected in how they do business? “I could never do what he did: to start the company, to quit your job and convince your wife to leave her secure, well-paying job – to gamble everything on an idea you had,” says Greg. “He’s the ‘bet it all on the black at the roulette table’ guy. I could never do that. As the head of PIC, I would never make a bet I couldn’t afford to lose. Dad was always making those kinds of bets.”
First published in the September 2018 edition of The Business Advisor.