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Join Derek Hudson as he explores Essential Dynamics, a framework for approaching the challenges facing people and organizations. Consider your Quest!
Welcome to Essential Dynamics. I'm your host, Derek Hudson. We've been developing Essential Dynamics to help us make sense of complex situations, how to run our businesses better and our lives and organizations. And I'm really thrilled to have Tal Pizzey with me today. Tal, welcome to Essential Dynamics.
Tal Pizzey:Thank you. Pleased to be with you.
Derek Hudson:I I really appreciate you coming on the show. It's been, I think, months that I've been chasing you. And as you've been setting up your organization for the for the future, I've kind of watched a little bit of what you've done lately, but I don't know your story and I'm really looking forward to getting to understand a little bit about the journey that your organizations have taken and you've taken, and then we're going to look and see what kind of lessons we can learn from that that apply to the things we talk about essential dynamics. So maybe first you could just introduce Acurin, Mhmm. Talk about your role and then maybe we'll ask some questions about the interesting history that you've been involved in.
Tal Pizzey:Sure. Alright. Yeah. The company is Acuren Corporation. We do have several other companies, but really that's the primary brand.
Tal Pizzey:And and for the most part, if we don't brand it Acuren within a few years of an acquisition, there's a strategic reason to, but but I would suggest probably 9090% of our revenue comes through Acuren. The the business has three service lines, nondestructive testing, which is something most people don't know what that means. I think there's a really nice analogy with the medical industry. If you if you have a sore arm and you go see the doctor, you know, he he doesn't cut it off to find out what's wrong. He might use x-ray or ultrasound or visual, and and we do the same thing on industrial assets like vessels, tanks, pipes.
Tal Pizzey:And we use nondestructive methods like X-ray, ultrasonics, magnetic methods, other visual and technologies to assess the condition of these assets because they degrade over time with corrosion, erosion, and heat heat degradation. So so we have inspectors in the field looking for flaws and helping customers prevent catastrophic events. And the second service line we have is engineering failure analysis. And that is a little bit more like the pathologist where people send in broken parts and shrapnel and anything from toilet tanks and pipes to roller coasters comes to our labs and we determine what went wrong and assess whether it was a manufacturing defect or in service flaw or designed poorly. And then the third sort of leg to our three service line stool is access solutions.
Tal Pizzey:And this is where we we found in the inspection work we do that our customers often spend more money scaffolding for us to get access than they do on the inspection. And so in 2010, we acquired a company that had what's sort of innovative to North America is rope access. So we have, you know, more than a thousand guys working, men and women working off of ropes, doing inspections and other trades related work. So those are our three service lines. The company operates from a 30 offices across North America and a couple in The UK, about 6,000 employees and 1,100,000,000.0 revenue.
Tal Pizzey:So that's kind of a quick overview of what we do and where we're at.
Derek Hudson:And and so you're based here in Edmonton. You're in Edmonton pardon me, Sherwood Park guy. Yep. That's that's important if you're in Edmonton and not anywhere else.
Tal Pizzey:Right.
Derek Hudson:And is the is the Acuren, like, headquartered in Edmonton then?
Tal Pizzey:No. Our global headquarters are in Houston. I have an apartment there and spend close to half my time there. But Edmonton is, you know, pretty sizable and certainly head office for the Canadian business. So we we have two main centers, Houston and Edmonton, but Houston is our corporate headquarters.
Derek Hudson:That's corporate headquarters. Okay. So maybe maybe you first walk through how Acuren got to be a $1,100,000,000 company because it didn't start out that way. And and what what happened in the industry and what was this what were some of the decisions that were made to to grow that that big?
Tal Pizzey:Okay. Sure. So I guess there's two main routes. I mean, in my time with the company, we've acquired 58 companies, but most of those are relatively small. But in our history, there's sort of two main roots.
Tal Pizzey:So I'll start in Canada, which is where my roots come from. The company I joined a company called Hanson Materials Engineering. We can probably get into more details on my history, but that company became CanSpec in 1991. And then in 1997, we joined a US company that was of the same size that we were in Canada. Both companies were 30 or 40,000,000 revenue at the time.
Tal Pizzey:And and so that's a quick version of the Canadian trunk. And then in The US side, the company started in, you know, as Longview Inspection, and it was in Longview, Texas. And a guy by the name of Peter Scannell with an investment group acquired very small company, about 3,000,000 revenue in 1991. And that was really the start of of the company at that point. And they had a real growth mindset from day one.
Tal Pizzey:The idea of doubling the business every five years with a combination of free cash flow from the business being used to buy companies, but also a real organic growth strategy. Over time, organic growth has been about two thirds of our growth with acquisition being one third. And so that company Longview Inspection, as I said in '97, was the same size as us in Canada. The two companies merged, doubled in size overnight and continued that growth journey through really to a sale to a private equity firm in 2019, American Securities. And then, and at that point I became CEO.
Tal Pizzey:Prior to that, I was chief operating officer of Canada for about twenty years. And then and then we sold again as private equity companies do and we're now a public company. So that's the quick version of how we got to where we are. It's really sort of phenomenal growth over a thirty year period. You know, it's kind of sensitive to the starting point, but it's pretty consistent 10 to 15% CAGR over thirty years that got us to where we're at today.
Tal Pizzey:And and those are the two companies that merged. And and we we maintain the CanSpec Longview name for a period of time even though we were together. And in 02/2005, we just created the name Accurin, and, you know, got some marketing guys and found some different words with different meanings. Accurate engineering is somewhat behind the two names and we made up the name.
Derek Hudson:Well, that's awesome. So two thirds organic growth and then one third also by bringing companies in through acquisition.
Tal Pizzey:Right.
Derek Hudson:What drove the growth? There was obviously a growth mindset. There was a company coming in and saying we can do this bigger and bigger and bigger. Right. What what other factors would would allow for that growth to happen?
Tal Pizzey:Yeah. I mean, to grow and growing are clearly two different things, but a big part of it is having a plan and wanting to grow sort of a real desire to to deal with that kind of disruption that comes from growth. So first of all, we certainly had aggressive goals. I think we benefit benefited from being in a pretty good industry. I think the tailwinds to our industry are aging assets.
Tal Pizzey:You hear a lot about infrastructure in North America and every nuclear plant, refinery, power plant, chemical plant, you know, these things are built for twenty five year life and they're probably more than 50 years old on average. So, you know, those CEOs don't keep their job by replacing assets all the time. They want them to extend the life and and we're the kind of company that helps them extend the life of those assets. So, you know, there's some good tailwinds. Maybe over time, the industry has grown about 4% and and some of that is just price and wage increase and some of that is is more hours from aging assets.
Tal Pizzey:And then as a company, you know, we just try to make strategic acquisitions that we can grow from new service lines. We, you know, being being the biggest company now, we we certainly have something to offer around technology and size and scale. And so we like to, you know, we strive to take some market share and and a little bit of share of wallet by offering new services like the rope access we introduced has been fast growing for a while now.
Derek Hudson:That's very interesting. So one question I have, in all this growth, how important was proprietary technology doing stuff that others can't do?
Tal Pizzey:You know, it's you certainly want to say it's a lot, but the reality is it's not as much as you might think. We we do not engage in a lot of R and D activities. We have a little bit. We generally rely on suppliers of of technology and equipment, and we certainly partner with them. And we might have a little bit more in the camp of applications engineering where we take great technology and apply it to our customers' problems.
Tal Pizzey:And so we provide solutions that might use that equipment in a bit of a unique way. But for the most part, our our reputation, our safety performance, our quality, our reputation, our our breadth of technology offering and size and scale is what helps us sell new customers and retain existing customers.
Derek Hudson:I think we'll get into it a little bit in our next conversation, but I've always been very interested in this idea that a good management is more important than a lot of other things.
Tal Pizzey:Yeah. I think you're a % right. We consider ourselves to be strong operators, sort of operations excellence and focusing on pennies. You know, I'd say we we throw nickels around like manhole covers. So we're, you know, pretty frugal and cost conscious and make good investment decisions, but also manage really tight.
Tal Pizzey:We're most of our revenue is labored by the hour. So we need to pay appropriately and bill appropriately and run a very high utilization.
Derek Hudson:That's great. So I do want to talk more about that, but let's go to you for maybe the next few minutes here. Sure. You're the CEO of a billion dollar corporation Mhmm. And you graduated from university with an engineering degree.
Derek Hudson:Is that right?
Tal Pizzey:That's right. Yep.
Derek Hudson:Did you have plans to be running a major company at some point when you finished school?
Tal Pizzey:Yeah. I mean, I guess I didn't when I was younger, but fairly soon it seemed like management path was what interested me most and opportunities came as we grew and I grew with the company. But as you say, did you know, I as a high school student, I had stronger math science grades than social English grades, and I felt engineering was kind of the right path for me. My math thirty one mark was my best mark. And so I, you know, I entered engineering not knowing what really engineering is.
Tal Pizzey:And the first year at University of Alberta engineering is is general. There's no specialization yet. And one of the things you do is you learn about the disciplines of engineering in your first year. But I had the opportunity, you know, I I took a job, a summer job in grade 11 doing heat treating. My now wife, but girlfriend at the time's mother was a payroll clerk for Hanson Materials Engineering, and I got a $6 an hour job doing heat treating.
Tal Pizzey:So that was kind of interesting, but not not overly interesting. And then the next summer I came back and was a helper doing nondestructive testing and that was more interesting. And then I registered in civil engineering after first year, but my summer job that year got even more interesting. And so I after returning to school, it took me a few weeks to switch, but I switched from civil to metallurgical engineering, which most people never hear about. There was, I think, eight people in my class and, you know, there's a lot of chemical engineering and mining engineering and petroleum engineering classes.
Tal Pizzey:But as you in years three and four, it's all metallurgy and it was pretty interesting.
Derek Hudson:So if I have it right then, because you've given me the pedigree of Accurad. You started in grade 11 at the company you're president of now.
Tal Pizzey:Yeah. Yeah. That's right. It was I've been I've had five owners, but I haven't changed jobs.
Derek Hudson:Yeah. I haven't changed jobs. Still have the same employee number that you did
Tal Pizzey:That's right.
Derek Hudson:And you're making $6 an hour.
Tal Pizzey:Yeah.
Derek Hudson:That's a that's a fantastic story. What for you personally, what were some of the hardest things to learn when you switched from engineering to being a professional manager?
Tal Pizzey:Yeah. It was a long journey. I mean, I I started well, first of all, you know, from '81 to '87, I was working summers and weekends, you know, started a family fairly early and, you know, money was helpful in my career. So I went co op or in my school life, I went co op engineering. So you take five years for a four year degree plus the two summers before.
Tal Pizzey:By the time I graduated in '87, I had worked thirty six months kind of in technical roles, you know, everything from machine shop machinist to testing in the field to heat treating. And and so that was kind of a value valuable background for me. When I graduated, I did failure investigation for about three years. That was super interesting, learning about all kinds of things. And and they asked me to manage small group of visual inspectors, like six people, I believe.
Tal Pizzey:And and these visual inspectors were doing jobs in Japan overseas. If if Shell was buying a pipeline and manufacturing in Japan, they would hire us to go over there and sort of oversee the quality. So that was kind of my first management opportunity. I was a young guy and had some 50 year old visual inspectors I was managing and it was kind of fun and interesting. And and then, you know, they asked me to manage a small department and develop some technology, automated ultrasonics for pipeline welding, weld inspection.
Tal Pizzey:So that was all pretty interesting. I went back to school on weekends and in a MBA program. It was at University of Calgary, but it was really a joint program between U of A and U of C. So I I did a two year MBA program, 20 courses, and I think that was really what launched me into a better spot, helping understand financial statements better, you know, in more detail and some of the tools to help an engineer be more bold in decision making. And so that that sort of launched me into bigger and bigger roles in management.
Tal Pizzey:But I I had already been on a little bit of a path with some smaller departments and, went from managing those visual guys to the Edmonton NDT department to the Edmonton office to the Prairies region to the country and then the next level. A lot of years in junior management roles.
Derek Hudson:So I took a different route, but a number of years out of university I joined a technical company as the chief financial officer and I was the only sort of management person there that wasn't an engineer or a scientist. Right. And it took me a long time to kind of learn engineering mindset. And then I feel like I kind of missed out on something because there's this fantastic, I think solid, approach that engineers of all disciplines have that's useful in management. Can you talk about that at all?
Derek Hudson:Because you've you've kinda done both.
Tal Pizzey:Sure. I you know, there's no question that engineering first of all, it was challenging. You know, I wasn't super strong academically. I sorta kinda wanted to play basketball at University of Alberta, and the coach told me he said there's three things in life. There's difficult school, there's basketball, basketball, and there's women.
Tal Pizzey:You can have two of the three. So I chose my girlfriend and my engineering. My buddy went the other way and and played basketball. But, you know, engineering was tough. We're taking five to seven courses a term.
Tal Pizzey:It was a full load. First and second year were particularly hard. But when I when I graduated, you know, you think back on you you certainly do not learn the things you need to do in your job. Like, there's so much new stuff to learn to actually do your job. But what what I really learned in engineering is how to figure stuff out.
Tal Pizzey:And I felt like even though I didn't have the Internet at the time to, you know, the way it is now with Google and ChatGPT, you know, I look at my son who could build anything, you know, just pull up a YouTube video and build it. I didn't have that, but I learned how to figure things out. And I think that was a really important structure to the engineering program. And, you know, it's not different from metallurgy to mechanical to other forms of engineering. It's it's you're given a basis to think critically and to and analytically and to solve problems.
Tal Pizzey:And that problem solving mindset, I think, has been super helpful in management.
Derek Hudson:And what does what did your business education add to that?
Tal Pizzey:You know, I think it rounded out rough edges a little bit. It helped with understanding business, financial statements, what measures of success there are. And it gave me more confidence to make decisions that would be helpful to the business.
Derek Hudson:So if you think about the path that Accurin has been on, were there any critical decision points that you were involved in that, I mean, obviously turned out well, but you weren't sure at the time?
Tal Pizzey:I'm sure there's many. As you say that the biggest one that stuck out is, you know, we bought this rope access company and it it seemed like a high risk business compared to the things we do. They were, you know, guys hanging from ropes in industrial settings. They were a very different culture. We have a an engineering mindset in our company.
Tal Pizzey:Technicians are sort of black and white thinkers and things are, you you know, you follow the rules and things are pass fail and you work safe. You know, this company owned a helicopter. They had guys doing crazy things. They were motorcycle racers and high risk sort of personal lives. And and we thought this company, it it doesn't necessarily fit our culture, but there was a lot to like about it.
Tal Pizzey:And and usually, you know, number one rule of buying companies is this going to fit in your culture. But in this case, you know, I think it morphed into a great business and some of the benefits and and their culture helped our culture in a lot of ways. And it's been a incredible winner for us. We they had 25,000,000 revenue in 2010 when we bought them. And now we're about 220,000,000 US revenue in that business.
Derek Hudson:In that business of people hanging from ropes.
Tal Pizzey:Yep. Every day.
Derek Hudson:Every day safely.
Tal Pizzey:Doing incredibly cool stuff. Like, you can't you you can sit in a in a industrial setting and look up and see nothing but blue sky other than a pipe rack, and we find a way like Spider Man to run a tension line from there to over there and rappel down and do the inspection and get out of the way and save the customer boatloads on building scaffolding, the job is done faster, quicker, better.
Derek Hudson:Safer. Wow. Everything. So, Talos, as we wrap up this section and then there's a bunch of stuff I want to ask you in when we get back together again, maybe you could just reiterate for us how important the work you do is to the lives of ordinary people.
Tal Pizzey:Sure. So on the nondestructive testing side, we find things before they break and blow up and fail. So when a pipeline leaks in a river, when a roller coaster comes off the track, when a refinery blows up, it's because some component in that facility had not been inspected and failed for some reason. And we prevent those failures every day. We have 6,000 people out working and they are looking for flaws that might lead to failure.
Tal Pizzey:So the work we do is important. It's important we do it right and we do it well. And when things do fail, our engineering labs are there to help our customers understand how and why it failed and help prevent it from failing again.
Derek Hudson:And is that purpose, does that mean something to everyone who works at Accurin?
Tal Pizzey:It certainly does. I think people feel a sense of pride and and know that the work they do has purpose. You know, I I read a book years ago, three signs of a miserable job. It's a common book out there. In fact, I think they changed their name once if people are searching for that book, but it's by Lencioni.
Tal Pizzey:But anyway
Derek Hudson:Oh, Lencioni. Okay. Yeah.
Tal Pizzey:Yeah. That's that book, it talks about people need purpose. It's, you know, there's three things and one of the signs of a miserable job is your your work has no purpose. And And I think our people feel a great purpose in what they do and they know that they're preventing, you know, catastrophic events.
Derek Hudson:Well, thanks very much, Tal. So the Essential Dynamics model that we use has three elements. Purpose is one of them. And the other two are people and path. And path is all of the things that people have to do to accomplish a purpose.
Derek Hudson:And in our next meeting, wanna talk about the path a little bit about Acuren's path. I think that'll be fun. Sure. But I really appreciate you coming on today and setting this up because this is a billion dollar corporation that exists to protect all of us. And it's been run its growth has largely been driven by, let's say management excellence, which is something that I'm fascinated with.
Derek Hudson:So I'd like to thank you for sharing your time and set it up for another conversation in a couple of weeks, if that's okay.
Tal Pizzey:All right. Well, thank you. Look forward to it.
Derek Hudson:Hey, thanks very much. Bryn Griffiths, thanks for your work recording us and helping us sound good. Al Pisi is CEO of Acuren and I'm Derek with Unconstrained. Until next time, consider your quest.