Taking It To The Next Level
By Rajitha Sivakumaran
From a business development standpoint, it is a smart manoeuvre to dedicate time and energy to marketing in order to spread the word, particularly for emerging companies. But if you’ve been in the trade long enough, other means can be used just as successfully. It comes down to one word: partnerships. Despite being in its infancy, Calgary-based Stratus Electrical & Instrumentation has flourished, reaching new levels of growth many times during its two years of existence because of the relationships its founders formed when they were salaried employees.
“Our work is all relationship-based work,” said Dave Smith, Stratus’s president. “We typically aren’t out bidding for open tender projects. We’ve made an extra effort to understand people and companies and get to know what drives them and form our services around that.” In and around Calgary, work primarily consists of people and companies Smith and the other partners and managers have worked with in the past. “We’ve gone out and developed relationships with not only customers but other businesses that complement our business,” Smith added, affirming that this sort of partnership allows Stratus to offer full solutions to its clients.
Having industry connections bringing in opportunities has worked well for Stratus; its first year brought $8.3 million in revenue and the number of employees jumped to 90 only five months from inception. Accordingly, Stratus was named one of the finalists for the Contractor of the Year Award presented by Alberta Venture magazine. The company was expecting to open its first remote office in Fort St. John in August, but its plans for expansion don’t stop there. Stratus will be expanding its footprint across Canada over the next five years by strategically placing offices around Alberta, British Columbia and Saskatchewan.
Mirroring the company’s growth is the utilities market, which continues to be Stratus’s biggest industry. The market has expanded substantially over the past couple of years. Accordingly, Stratus’s founders positioned the company strategically in that industry. The utilities world is a special market, says Smith. It is partially made up of very technically-minded individuals; these are the people Stratus has partnered with. “We come in with the horsepower to get the job done and let the technically-trained people do what they’re good at. We all work together to help each other be successful,” Smith said.
Apart from utilities, Stratus’s footprint can be found in anything that involves power generation and distribution, from substation construction to wind farms and everything in between, including oil and gas, and food and beverage. In a typical year, the company takes on 40 percent utilities, 40 percent oil and gas and 20 percent local construction and maintenance support. This diversity helps especially when one industry suffers; for example, Stratus continues to grow despite downturns in Alberta’s oil and gas sector.
The downturn, however, has created other problems. “One of the biggest risks and challenges right now is not sticking to the plan, not being very careful with who you partner and what work you take on because as there is less work you may become more desperate to take on contracts that may be riskier and a little bit more outside of what you do,” Smith said.
But it is acceptable to stray a bit in some cases. Apart from the electrical and instrumentation side of the business, Stratus has created a lucrative niche by helping other companies through peaks in their production. In this world, Stratus takes on the role of labour broker. Although these businesses are already equipped with personnel, they look to Stratus for assistance for all kinds of reasons, like tight deadlines and holiday backfill. It is much more feasible for industry partners to call on Stratus’s labour supply rather than hire a supplementary crew for a short duration only to let them go soon after, Smith said.
From salaried employee to president
After completing his electrical apprenticeship in Calgary, Smith became a journeyman in 1998, worked in the commercial world, got his Masters designation and then moved up into several managerial positions. Entering the industrial electrical instrumentation business opened up an exciting, new chapter and success in this venture paved the path for something a bit riskier: entrepreneurship.
“I’ve spent a lot of time building relationships with other companies,” Smith said, and that has certainly made the transition from salaried employee to president of Stratus easier. But sitting on the throne sometimes sounds far more glorious than it actually is. Being president means great responsibility, but it also means a shift away from what Smith calls the fun stuff. For him, building the business is the fun part, but in his present capacity, he does less of that.
Though it is rewarding, the job comes with zero breaks, and thick skin is needed to brave follies and quandaries. There is also a financial stress. Though he held a different job title before, Smith still performs the same sort of tasks in his present position. The only difference is that as an entrepreneur, he and his partners are directly impacted by successes and failures.
Taking on executive-level positions can seem daunting, especially when a long-time salaried employee is diving into it for the first time, but it is an important part of career development. This is why Stratus is an employee-owned business. Although the company does have external partners, a large chunk of the shares is set aside for employees. “Overtime we want that to grow so that we have our key people with their skin in the game,” Smith said.
Being a decision-maker in the company also gives Smith the opportunity to give back to the local and international communities. He participated in a Habitat for Humanity build in Vietnam, an experience he described as simply being amazing. In fact, Stratus is sponsoring one person every year to partake in this endeavour.