EP15 Family Business Innovation and Culture: Russell Hay, Scandinavian Building Services

Speakers

Speaker 1: Matt Knight

Speaker 2: Russell Hay

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Matt Knight  00:00

Welcome to Table Talk. Today. We're gonna dive into a tiny, little Edmonton janitorial company and how they scaled into over 8000 cleaners and 160 million square feet that they now clean every single night. Hopefully I got that right, and this large service company is actually still a family owned business. We'll hear about this in a little bit and a lot more on my conversation with Russell Hay with Scandinavian Building Services, he's going to talk more about his journey and how Scandinavian grew from a single contract in 1956 to a coast to coast service business and pushing into the US. Now we'll learn more about automation and how the cleaning industry is using in house technology and innovation to drive change in the industry, and really looking at you know, almost the ability to turn you know bumps into data. 

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So welcome to Table Talk The show where family businesses and business families share candid stories of growth, leadership and legacy. I'm Matt Knight. I'm your host and executive director with the Alberta Business Family Institute. 

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So today, you know, we're gonna learn more about this company that, you know, as long as they're doing a good job, you almost never see them. They're there, you know, cleaning. You know, just about every sports facility and shopping mall and, you know, I think even some hospitals and things like that, and all of these things are spotless, and we never see it, but, but they're there and they're getting they're getting this work done, and it's just a huge, important task for a lot of these their customers throughout their supply chain. 

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So Scandinavian building services began as a one truck janitorial company in 1956 in 1982 Russell's parents, Terry and Wilda hay, bought the firm and started growing it. Russell joined the business in 2005 and became president. And see in 2013 CEO in 2019 and the hay family has been featured as a part of a very special series that we do at ABFI called the signature event. They were our signature family in 2022 which was my first day on the job. Yeah. So kind of a neat connection there. And then we've also done a business case with hay and with the hay family and SBS, where we actually get to bring the story into our MBA classroom and our Executive MBA classroom, and it's just a really special experience. So we'll dive a little bit more into that. So Russell, welcome to Table Talk. 

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Russell Hay  02:25

Thanks for having me. It's a pleasure to be here. 

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Matt Knight  02:27

Thank you so much. So let's maybe start with a quick 60 second pitch what to give a little bit about the history of the company, but tell us a little bit about what SBS is, or what Scandinavian building services is to you.

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Russell Hay  02:40

Yeah. So Scandinavian Building Services, like you said, it was founded in 1956 by two Scandinavian brothers, and they had, they had two sides of it. They had one on the property management side, and then they had the other side, which was the janitorial side, and how we got into it. And I always joke around, because people don't usually just get into the janitorial business. Usually born into the janitorial business, but my father worked for a company called Humphrey Developments, and at the time, they relocated him to Yellowknife, and being in the property management side, his number one pain point was janitorial services. He couldn't find consistency. Couldn't find efficiency, and it was just always a fight for him. 

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And at that time, my mother wanted to move back to Edmonton. Yellowknife,, a beautiful place, but the weather is pretty harsh, and she wanted to have children and go back to her roots and come back to Edmonton. So when my father came back to Edmonton, that's what he wanted to do. He saw an opportunity to revolutionize an industry. And you know when, even back then, in 1982 he said, it's just so archaic. There's nobody following up. There's no quality assurance programs. Communication is poor quality, control is poor efficiency, consistency. 

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And so he managed to find this business, and one of the brothers wanted to exit out of the business, so my father bought it from him. And it's funny, because we're not Scandinavian, and it was called Scandinavian Building Services, and it's kind of a unique story. The reason why we hold the name still is because they had a handshake, hand shaken agreement, and he just promised him that he wouldn't ever get rid of the name. He was very proud of his roots, very proud of the name. And so the handshake agreement, and we've kept it to this day. So it's kind of a neat, kind of a neat story there. 

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Anyway, at that time, my father, it was just very, very small, just Edmonton based janitorial company, and then he had an opportunity with Northlands Coliseum. So that's why it's really neat that we're in the sports and entertainment industry, heavily into. That industry. It's really where we got our roots, and that's kind of where everything flourished from in really understanding the needs of customers. And if you can, if you can clean a sports and entertainment center, you can pretty much clean anything, because you got to remember, you got all the fans going into the stadium, and they love to have a good time, which is fantastic, but you usually have very tight time frames in which you need to clean it up. Yes. So that was just a really great entry into the janitorial side. 

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And really being able for him to revolutionize it in new systems and controls, finding efficiencies and and from doing that, he was able to to secure the contract with West Edmonton Mall, which was a large milestone for the organization, and really putting him on the map. And then that gave him exposure to different manufacturers, different suppliers and that allowed him to be able to continually expand the business, but again, being on that innovative side, which was huge. So from there we started to expand. 

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I guess I'm not really doing the 62nd pitch. I'm doing like the 10 minute deal here, but it really was from an Edmonton based company into Alberta to British Columbia, into Manitoba, then Saskatchewan, and ultimately into Ontario, Quebec and then Atlantic Canada. So it sounds-  it's very easy to say that, but there's been a ton of hard work to do that. But Scandinavian is a janitorial maintenance company, and we primarily focus on the retail, on the grocery, commercial, sports, entertainment and industrial side of cleaning.

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 But one thing that a lot of people don't know about Scandinavian is we do smaller facilities as well. It's not just large, million square feet malls or sports entertainment environments or big commercial spaces. We also do small venues as well, which is small office buildings, which could be 1, 2, 3, day a week, cleaning. It's basically from as small as you can get, to as large as you can get, and everywhere in between. 

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Matt Knight  07:23

Nice. So was that, you know, in 82 or whenever those contracts with Northlands came up, was that an intentional strategy in the sports area, or was it just, you know, hustling and trying to get the work wherever the work was?

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Russell Hay  07:35

It was hustling. It was just that's, that's where he had his opportunity built around that at that time, wasn't really being picky and choosy. But again, I think the vision for him was ultimately to be able to say that if we can provide a service to a large facility like Northlands and sports entertainment, and be able to turn over something like that and have it in pristine condition the next day or in hours, that we can pretty much do any kind of cleaning that you throw our way? 

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Matt Knight  08:06

Yeah. And like you mentioned about West Edmonton Mall, like, if you can clean the largest mall in the world, you know, that opened a lot of those doors to innovation and new products and testing some of those things. But also, if you can do that, you can do anything. 

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Russell Hay  08:17

Yes, absolutely. And you know, the big thing for him. I mean, it was all about innovation and new quality controls. And, you know, he was, he was one of the pioneers to go to electronically quality assurance programs. But ultimately, and, and if he was here right now, it would, he would always talk about the people and, and that's really where it came to accountability, and if you treated the people correctly and they believed in what you were doing, that's how you were able to get them accountable, and that's what he that's what he strove for his entire career, and that's really what started this incredible Scandi family legacy that We have now right from the ground roots.

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Matt Knight  09:02

nice. So let's maybe dive into your own story. So when you joined the company or the family business, was it a no brainer? Was it a wrestle? How did you decide if this was something you wanted to follow? 

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Russell Hay  09:13

Well, this will be a lot quicker, because it's not as cool as his. No, you know what? From a young age, I guess when you have an entrepreneurial father - a family, my mother was as well. It just was natural for me. I just, I loved it. You know, my mom saved all of my little projects from when I was in grade one and two and every year it always says, What do you want to be when you grow up? And it says a businessman, and on every one of those projects. So I just loved it. I really looked up to him and appreciated him, and as I grew he could see that, and he nurtured that for me. So he allowed me the opportunity. 

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The one thing was, though, is he, he always told me that you have to work from the ground up and you don't. There's no. Free passes here. So it was, it was really learning the ropes and going through all of the different positions in Scandinavian. Obviously, I've done a ton of cleaning jobs, and we don't want to get into that, because it gets pretty, pretty gross, I guess you could say, but it was, it was just a really great experience to understand all the different positions within an organizations in the organization and how it ultimately ran. And I was always intrigued by that. And then I, you know, when I was in my early teenage years in high school, I really started to like to get really interested in business development. I loved the idea of being able to grow the organization. 

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So it's kind of a funny story. I turned 18, and it was my first day on the job with him. I was supposed to shadow him, and we were going to go to this presentation. I was going to watch how we did this whole presentation. And just as we're walking in, he looks at me and gives me the presentation and says, you're doing it. And I'm like, No, I'm not. I'm not doing it. What are you talking about? I'm not doing it. I have no idea what to do or what to say. And he said, Well, if you can sell. He said, You can sell. Yeah. He said, so you're going to go and see how you can do it. And man, it was just the greatest learning experience. And that's really, really how he taught me: he taught me by example, but he always pushed me to try to excel and to achieve, you know, and and really try to flourish, what my strengths and attributes were. And it was just, it's just a really neat story, but that's kind of how I got into Scandinavian and really understanding on how to grow and build the business. 

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I loved how you can walk into any establishment and they need cleaning. So it's about how you can understand that customer and the needs of that establishment and be able to provide them that service. 

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So I was young, got out of the business a little bit. Went to college. I started a little company called The Little Fogger, which was, which was a little offshoot. It was, it was when smoking and casinos and restaurants was still allowed, and what it basically was to fog these areas and you neutralize the smoke smell. So that was my first kind of toe into something out of Scandinavian. And you learn really quick, because it was, it was going pretty good. I was gaining quite a bit of traction in Edmonton. And then all of a sudden they passed a law where you can't smoke in in facilities anymore. So in a few months that was gone. So it was a very good learning experience to understand the fragility of business and that you really have to make sure that you have foresight and vision in that. 

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And then while I was in college, actually, my dad was looking to expand the business. And I, at that time, I was heavily working in Scandinavian, in building out the business in Edmonton and working in it operationally. And he was looking for a partner. And at that time, I put my hand up and said, Hey, Dad, I would love to be your partner. I'd love if he gave me the opportunity. You know him and I worked so well together. I - you know he was my mentor, and he gave me the shot, and him and I just ended up working very, very well together. And I guess from that perspective, the rest was history and we just started to build out the organization, which is a whole another story, but that's kind of my story and getting in with the organization. 

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But you know, the one thing, and I said it before, and I appreciate it so much that he made sure I understood the business from the ground up. It was never coming into the organization. As you know, you like sales, so now you get to go and sell. No you have to understand why we exist, what our culture is, who the people are, why we do what we do. Understand our customers. Understand cleaning. Understand how you clean, how you strip and wax, how you window clean, how you carpet clean, how you concrete, polish, everything, all the above. And it was an incredible journey. And it was, it was kind of neat too, because all of my friends came on the ride with me. So we always had our fun project team. So anybody that really wouldn't want to do a particular job that might be a little bit gross to the average person, I'd get a team of buddies together, and we'd end up doing that. So it was, it was a lot of fun growing up, but really understanding the grassroots of the business from the foundation. 

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Matt Knight  14:46

And it is that, like, if you don't understand the service and actually how to clean things, how are you going to understand how to sell them and how to talk about them, and how to, you know, kind of remove those pain points from your customers lives or experiences, absolutely. So maybe. If we will transition a little bit more into the family ownership side and the family business side now, especially since I know we were talking a little while ago, where you've now, you know, recently appointed the first non family President within the Scandi family, which is probably a big, big change. So what, let's maybe dive into that. What drove that decision to kind of hand that President's role over to a non Family Leader and talk us through that process.

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Russell Hay  15:23

Yeah, for sure. You know what it was. It was a difficult process, but it was one that we felt was necessary within the organization. You know, it's not about the hay family, it's about the Scandi family. It's about Scandinavian Building Services as an organization, and that's number one. And although all of us work within the organization, and we have Melanie and Candace, they're absolutely fantastic and wonderful. But what we were finding is people wanted to be able to see what their succession plan were, and or was, sorry, and, and we had many talks within the organization to really understand where they thought their future would lie within Scandinavian and it's always been the person that's qualified for the position is the one that should be in the position. 

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I always talk to our staff. It's - we're not a hierarchy. We're very much linear, and we all provide our expertise in whatever role that we provide for the organization, and together, we continue to build and grow stronger as one. And if there is weakness within and we always call it, we always call it our scanning fence: if there's a weakness in it, we have to identify that and make sure that we rectify that, and then we move forward together. 

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It's very important to us and when we were looking into the organization for myself, because I was the president CEO, but I really wanted to start working on the business, not as much in the business, and we're doing some really incredible things, and some growth strategies and expanding the organization. We needed to find that individual that could take on the role of the President, but, you know, really working in the business, but somebody that understood our business, understood our culture, and understood our people and understood our customers, ultimately, and we found that his name is Mamdigdu, and he's worked with us for over 25 years. He has an absolutely incredible story as well. But he just, he just exuded everything that we wanted in that leader in Scandinavian, and it wasn't necessarily, it had to be somebody that was blood, because I consider him a brother. And when people look at Scandinavian, they see Mamdigdu as part of the Hay family. 

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But again, at the end of the day, it's, it's about the Scandi family, and he was just an incredible leader to do so. But it was, it was, it was just a monumental moment for us as a family to be able to trust somebody to run the organization for us at that level. And you know, in doing so, it's proven to be just an incredible opportunity for him. It's been incredible for the organization, and he's really showing me how good he is and how bad I guess I was.

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Matt Knight  18:29

So I guess as much as I introduced it as a non family president, he actually is family, but it's just the Scandi family.

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Russell Hay  18:36

It's just a Scandi family. Absolutely, yeah, and you know what? In saying that, and to digress just a little bit, that really showed our organization as well that there is opportunity. There's continuous opportunity within the organization. You don't have to be a family member to, you know, to lead the organization, you just have to understand the organization, believe in the culture and believe in the service and the values of the organization.

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Matt Knight  19:02

Yeah, which I can imagine, is a pretty powerful message and motivator for a lot of those leaders throughout the company.

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Russell Hay  19:07

Yes, absolutely. 

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Matt Knight  19:09

So how, you know, how does that appointment of Mamdigdu kind of change those day to day dynamics, either for the organization or for yourself or for other family members?

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Russell Hay  19:19

Yeah, you know what it's been. It's been incredible for our family, specifically, we've, again, we've been able to, for myself, I've been able to, you know, really become the CEO that I aspire to be in again, working on the business. And it's been, I think it's been very beneficial for the organization, and it's allowed the different divisions to collaborate in a different way, in a different way. 

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There's also been other promotions within the organization, Melanie and Candace, they're still on the board, still active within the organization, on more of a consulting role and a mentor role within the organization. But, um, when we talk about human resources, risk management, procurement, health and safety training, there was a ton of movement within the organization, and many people got promoted as well in doing so. And just the collaboration that's happened between the different divisions and and the response that we've had in in how they will really want to show what they can do and and how they want to revolutionize the business and what they can bring to the table, and the the incredible ideas that they have, not to say that they didn't before, but we've really empowered them to do so. And it's just, it's just been a fantastic ride so far for them, and it's been just incredibly beneficial for the organization.

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Matt Knight  20:47

Okay, so kind of like all three family members or siblings, I don't even know what to call the three of you together, but, but have moved into more working on the business and kind of out of those day to day type roles now, correct? That's exactly what we did, yeah. And then, you know, a lot of our, some of our listeners, and some of the people who know ABFI quite well, you know, would have heard a lot of the stories over the signature event. But what else, like, what has been some of the other big changes over the last three years,

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Russell Hay  21:16

You know, for Scandinavian, the whole, the whole thing, I mean, COVID was just an incredible learning experience. You know, when we had, when the NHL had the playoff, the playoffs here in, in Rogers place. I mean, what a learning experience that was. And just we, at that time, we had our five year strategy, and we, we made it about a year before COVID had happened, and just being able to understand the landscape and what was happening with COVID, and obviously it affected our business tremendously, right? Well, everybody's running out of these facilities. Our people are going into them, right? 

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And it was, it was actually quite incredible, just to go on a little segue here, you know, you think our turnover would have been quite high during COVID, when everybody was just so nervous about what was going to happen, the effect that it was going to have, on, on, on us. And individually, none of them steered away. Everybody felt it was their duty to go in and provide that service. And it was just so inspiring. Our cleaners are just incredible people that take so much pride in their job and their duty for all Canadians. And it was just incredible to see, and that's really, I think, what was the foundation and the backbone of us being able to get through that, because we had very aggressive growth plans prior to COVID, and we were able to accomplish that through the incredible hard work and dedication of our of our cleaning staff, quite frankly. 

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And it was really to expand Scandinavian, right across Canada, into every province and territory within Canada. And it wasn't just being, you know, more metro locations. It was really, how can we say we can Service Canada in its entirety, in all the rural areas and the metro areas. And that was a big goal of ours. And really, it's funny, we were we were diversifying, and we didn't realize that it was going to be in the essential services space, which was fantastic for us during COVID, because like everybody else, we got hit pretty hard with, you know, part of our business that wasn't in the essential services space, but so that was, that was a very aggressive growth plan, and it was very unique because we did, we did the majority of it right in the heart of COVID and man, did we learn so many different things. You know, when you have your pandemic plans, but you're actually in a true pandemic, you kind of rewrite the pandemic plan, if you will. And so that was an incredible experience. 

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And then right now, and going forward into the future, expanding into the US, which we've been very focused on as well, and that's been a really great business venture so far for us. 

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Matt Knight  24:26

Nice, So we'll go into a little bit of that more. But, you know, I can imagine too like that would have going through the pandemic would have really elevated, kind of the importance and the respect of the services that you provide as well. Like people probably wanted to see that cleaning more often. Where before, it's always been kind of something that happens at night, where now it was they really wanted to be like, Oh, this has been clean. That's great. I feel better going there. 

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Russell Hay  24:49

Yep, exactly. And you know what? It was so good for them, for for the industry to be recognized for what they do. And like you said in the beginning of our talk, nobody really notices. Unless you need to notice, they won't notice. Unless it's dirty, right? If it's clean, they probably won't notice. But it was, you know, it was, it was great recognition for the industry and for the people that go in there day to day. And it's not easy work, and there's a lot more to it than people understand. So it brought a lot of that recognition, like you said, and when you have government officials thanking them for what they do, I mean, that was a very proud moment for us, and we really appreciated that. And for, you know, everything that our cleaners do.

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Matt Knight  25:31

Wow, yeah, it would have been probably pretty special for the organization and those individuals throughout that time. 

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Russell Hay  25:36

It definitely was, for sure. 

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Matt Knight  25:38

So going more into industry changes, we've made it through the pandemic. You know, like you said, cleaning sounds simple, but there's a whole lot more to it than people realize, especially now with, you know, technology and AI and all this rapid innovation that's coming out you mentioned at the beginning. You know, your dad was instrumental in looking at a lot of those innovations and new ways of doing things. What's the biggest shift you've seen in the industry since joining in 2005

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Russell Hay  26:04

Yeah, you know what? Innovation? Like you said he was huge in innovation, and that just, you know, I'm a see that didn't fall far from the tree. I love innovation. I love technology. And really, that's what it is. The difference on, on, you know, when we're talking about artificial intelligence, we're talking about analytics and machine learning and how important it is right now for our organization. 

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I mean, I remember one of the one of a large moment for us in Scandinavian was as soon as the iPad came out. I think it was in like 2008 I believe it could be around 2007, 2008 somewhere around there. Sounds right. Sounds right. And we wanted to be the first ones to put our quality assurance program on an iPad. So we were the first ones to actually do that in Canada. And it was just revolutionary for us. I mean, it was great when we go, when we would go into presentations and we were bringing an iPad. They were just, they're more interested about the idea. I wanted to, you know, what is this device, and how do you use it? It was, it was really neat. 

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But, you know, that was really the start to something and and we really, I felt like we were pioneers in that, and in revolutionizing the way we communicate to our customers the way that they're being able to access all of the data, because there's so much more data that's there than people actually think. Yeah, and you know when you if you go in and let's talk about a sports entertainment arena, think about all of the different areas that you need to know with certainty are cleaned because you don't have the manpower to go around and and check it all before you're having the customers come in and the fans come in. So it's really important that they have the transparency of exactly what we've done and every task that we've done, every single shift, every single day, so that that has been just monumental when it comes to communication and visibility, utilizing the analytics and the different technologies.

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 But you know, for us, I think the big shift that's happened within the last five years has been robotics. For us in the janitorial industry, you'll see them when you go to the shopping center, you go to a grocery store, but it's, it's working with the manufacturers of those robotic companies on how do we keep iterating these things? And you know, they're, they're not perfect by any means, but as technology grows, they continue to iterate them, and they continue to become more sophisticated. And that's been a great tool for us at Scandinavian. And, you know, we pride ourselves. We have the largest robotics, robotics machines in our country, the largest, I guess you could say volume of robots at any given time throughout Canada. And it's, it's been a major focus for us, because, you know, at the end of the day, again, when you say you're innovative, you want to be on that that forefront, and make sure that you're working with the manufacturers, so we know where we need to develop and how we can refine these things. 

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And it's, yeah, it's been, it's been a lot of fun. And it's, it's another thing when you're, you know, trying to get people to adapt to it, right? Because you can look at, you know, cleaners or, you know, operational staff or customers, you know, everybody is a little bit hesitant at first, but when you can show them the benefit cost analysis, yeah, and, and, you know, you get an ROI on them if they're in the right environment, and then then they listen and they're intrigued. 

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Matt Knight  29:54

That's an odd question that I think I've ever asked before. But do you have a favourite robot? 

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Russell Hay  29:59

But I would say, I would say, right now, for us, it would definitely be, be an auto scrubber. They're, they're really neat, and they're, they're critical for what we do every day in cleaning the floors. A lot of people won't know what that is. A floor cleaning machine looks like a little Zamboni.

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Matt Knight  30:18

So a lot of the work that we've done at ABFI looks at kind of the balance between, like, AI technology adoption and family values. How do you view that, like, how do you balance innovation and robots and all this new big data stuff with the fact that you are a family business and that you're guided by a lot of these family values, and, you know, knowing all of your employees and being able to have those relationships and that, you know, very hybrid or, sorry, very, you know, non hierarchical structure within the organization.

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Russell Hay  30:50

Yeah, I think it comes down to communication and, and, you know, again, people are they, they can be nervous about this, very reserved. And I think it's about being transparent and making sure they understand what the vision of the organization is. And it's not about robots taking over, you know, a human role, because there's still very much a human aspect to running these things, yeah, but it's on. What does that? How is that human aspect shifting? But instead making sure that they understand why we're doing it, how we're doing it and how it's going to affect them, and how it's going to affect our cleaners, how it's going to affect our management staff and the values of the organization. So really, I think it comes down to transparency and communication. I think that's the biggest key for it. 

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Matt Knight  31:39

So more that, more using it as, like an augmentation strategy, too, and not just automating things for the sake of automating

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Russell Hay  31:46

Exactly, right? Because, I mean, if it, if it doesn't make sense, and and it really, it ultimately comes down to our customers, right? Like we would never want to implement something that wouldn't benefit them. And so if we go to a space and we realize that it's, you know, the technology might not be there yet, or this piece of technology might not be suited correctly for that facility. Then, then we would never introduce it into the environment.

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Matt Knight  32:12

So tell us a little bit about ScandiTrack what you know, it's a cool sounding word. What is it? What's its story?

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Russell Hay  32:18

Yeah, so that's our quality. That's really the nucleus of Scandinavia, and that's our quality control system. So that's when we were talking about that's all of our information system. That's all of our data analytics. Everything is captured within ScandiTrack. And it's a unique system. It's proprietary to Scandinavian, and it's something that we developed many, many years ago, and we wanted to build ScandiTrack out to be completely customizable to the janitorial space. What we were finding is, yes, you could go buy a software, but again, it wasn't specifically created for the janitorial environment, and that's why we decided to build our own now, in saying that, you know, just like everybody else keeping up with technology, we've also had to adapt as well. So we use other third party organizations as well to continue to build and to iterate ScandiTrack, but ultimately it's the ability for our customers to have full transparency of their facility without ever stepping foot into the facility. 

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So things like you know on our ScandiTrack app, utilizing machine learning when an individual will be going in, and let's say they're doing an inspection. One of our customers is doing an inspection of the facility. Well, it understands, you know, their behaviours, what they're looking for when they've been in the app. So they walk in, maybe the first thing, or one of the most important things, is the washrooms for them. So when they open up the app, it will give them a summary of what the score of the washrooms are, when the washrooms were last serviced, the last inspection of the entire facility, when was the last service request? What's the budget of all of the extra services that have been performed during that month? So all the pertinent information that that individual needs to know, but more importantly, what they want to know, because everybody's different. 

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So that's, you know, that's one really incredible way of utilizing technology, so they can go in and it starts to understand your behaviour. And that's been very beneficial for us, because we find, if somebody can use the technology, go in and, you know, that just brings down the questions, or, you know, an email or a phone call, dramatically. It drops significantly. It's dropped by like 50% because they know that they can, yeah, they can have all that information at their fingertips. And again, it's specifically for them. So that's just, that's just the application. But again, making sure that you know our customers as well as everybody that works in Scandinavians, both on the front end and on the back end, just all of the data, all of the information that we're capturing during every clean. 

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And you gotta, you gotta think about it, because now our cleaners are not only cleaning, they're also capturing data as well for us. So, you know, utilizing beacon technology. So when we're, you know, our cleaners are cleaning a facility, they're getting pinged on their phone that they're carrying every second. So we know exactly where they are, how long things are taking. So again, that helps with efficiencies on what we can do. It helps with health and safety risk management. So there's so many different benefits that, yeah, that are, that are at our disposal and that we utilize through scanty track, but really that is the the nucleus of the organization in terms of all of our data capturing. Yeah.

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Matt Knight  35:57

So one of the questions I often ask, especially with second generation business folks, is around, you know, how do you balance innovation and technology with kind of respecting the legacy and where the business came from? But with all this innovation and tech that you're talking about, it all kind of goes back to your dad's initial vision for what he wanted in a janitorial company,

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Russell Hay  36:17

Exactly. And I think for that, you know, where it started from, and always wanting to revolutionize and being innovative. I think that we've always just, you know, appreciated that, and it's just been part of our value in how can we continue to build and grow what worked yesterday is not necessarily what works today. And we've always had that mentality. And at the end of the day, if we're on that leading edge, and we can provide that for our customers, you know, our customers win. And if we can make the jobs for the cleaners easier, they win our management staff, if it helps them with, you know, capturing data, then it benefits them too. So overall, if we can do that as an organization, we're winning.

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Matt Knight  37:08

Yeah, that's pretty like, I never made that connection before, but it's, it's pretty unusual, and I think, pretty special as well. So let's maybe go away from the tech side and go into some of the softer side of things. How would you describe, you know, kind of your leadership style when it comes to the organization, and how have you had to change that now that you're, you know, shifting your role a little bit.

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Russell Hay  37:28

You know, I love to lead by example, and I love to empower people. I'm very much more of a macro leader. I would say I trust people, and I believe in people, and I believe if you do give them that, and you empower them, you give them the tools to be able to excel they will. And I think that I learned that again, I learned that from my father, definitely. He might have been a little bit more of a micromanager than me, but I think that's the difference. When you talk about first and second generation, he had to be, he was the founder, right? And it's a lot different from being the founder to being the second gen that, you know, it's my job to springboard the organization. 

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If you look at, you know, first and second generation, yeah, and that's really important to me, but it has been, it's funny for me. It hit me like a ton of bricks. I guess you could say when the transition actually happened, you know what? I guess that that really it, it stamps, or it seals your decision, that you made the right decision, when the when the appointed individual happens to be mammal like our President, does such an incredible job and takes it so seriously and and starts to and he's, you know, he's making changes in his own way, and anyone working with all the divisions and with our customers in his own way. And I really was, it was hard to step back from that. It was hard to step back from understanding and knowing the day to day and and having my, you know, you know, fingers on absolutely everything when it comes to what we're doing, how we're doing it, what we're providing for our customers and and really being involved in the business, which was quite difficult for me, because I enjoy it. I enjoy, I enjoy, you know, producing every day for our customers. I enjoy, you know, having a think tank with, you know, with our individual divisions, and it's, it's a lot of fun, not saying that we don't do that, but it's for him to start leading that, and it's for him to come to me and say, Hey Russ, I think we need, we need you in this particular meeting. Or, hey you know that that sounds like a fantastic meeting, you know, I love to be in it, saying to me, no, we don't need you in it. You know? And that was definitely an eye opener for me and a learning experience. 

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But, but yeah, and with my leadership team, yeah, my leadership style is definitely one in which empowering them, understanding them and collaborating together. I really love having, you know, having open dialog together and think tanking things out and really understanding perspectives of individuals. And I always say it doesn't matter who you are or what your position is, whatever the best idea is, wherever we're going, that's the one that we're going to take. And that's really how I've always really tried to lead our team.

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Matt Knight  40:44

That's really kind of empowering them, getting out of the way, and then giving them the support that they need.

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Russell Hay  40:48

Absolutely. Yeah, 

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Matt Knight  40:50

Nice. So I mentioned a little bit at the beginning about kind of, you know, the role the hay family played in the signature family, back in 2023 No, 2022 I should know this a lot better. How did that opportunity come about? Like what prompted you and the family to open up to ABFI and the community, and why did you say yes to that?

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Russell Hay  41:12

Well, one of the big things for us was that my father loved to use the word Empower again and educate the younger generation on family business, and he always made time for them to you know, and he never would say teach, because that's not what he was. He was a mentor through example, but he would always give time for them if anybody wanted to learn from him, or if he had an opportunity to go speak on business in particular, not necessarily just family business. He loved to do that, and he loved to give back to the next generation. 

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So, you know when, when he passed and we were, we were speaking with ABFI. We felt that it was just a it was the right time, and it was a great time to honour his legacy, because he was so passionate about it, and we thought it was a perfect time in his honor to give back and and it touched us personally, and I've talked so many times About about RoadMap, it was so influential within our family, and we thought, you know, you know, how can we give back to because it was instrumental. I mean, when we look at our succession planning, that was what stemmed all of that conversation, yeah, and really started all of that. 

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So, you know, I've talked about it so many times because I'm quite passionate about it, and it was just so significant with our family in particular. So that's why we felt that it was the right time, and that's really why we wanted to get involved with it. And, you know, just like anything else, what an incredible experience. You know all the individuals that are a part of ABFI, but you learn so much about yourself. 

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You learn so much about your family. You know, we - it was very much about, you know, honouring God's legacy. But then it was about how we work together and how much we appreciate and love one another. Our family is we work incredibly together, but, but we truly love each other. We love family, and we love that we can go to work together and we're in the trenches together, but we can have a family dinner and we just love being in each other's company.

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So it was just great learnings. We learned so much, and, you know, at the Signature Event itself, that was just a fantastic event for us. We truly loved it. It was great everybody that came out to support us. And it was, it was bittersweet in a way, because one of the first events that I went to, obviously, my dad's the one that brought us to it. And I mean, we were all  - I was quite young. I think I was only 16 years old at the time, and I just remember looking at them and being like, wow, wouldn't that be incredible to be a family on that stage, talking about your family business. And I remember talking to my dad after that event, being like, Hey, Dad, one day that'll that'll be us one day, and just just wishing that he would be able to be with us on that stage, because he has just so much to share and so so much wisdom to give, but just having that experience with him,

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Matt Knight  44:28

wow. It's pretty amazing. Do you remember what that first event was like? Which family that was when you were 16?

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Russell Hay  44:34

Um, it was, it was the Fuller Family.

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Matt Knight  44:39

Yeah, yeah. But the Earls, yeah, yeah. That would have been a pretty, pretty pretty interesting story, too.

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Russell Hay  44:43

It was an incredible story. Yeah, it was an incredible story. Yeah, nice.

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Matt Knight  44:47

So you touched on, kind of, you know, a lot came out of that experience for you. So, kind of, like, personally, if you could reflect on that, like, what was the biggest learning, asides from, you know, you said kind of the depreciation that you had for your own family, which. Pretty special. But what was the biggest learning that came out of that for you? 

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Russell Hay  45:04

Appreciating our values, appreciating what got us, got us there, reflecting back on, you know, how we were founded. You know, we have our core values, which are service, motivate, respect and connect, and what those really mean, why, and when we say the Scandi family, what does that really mean, and why? There's a lot of self reflection. You know us as leadership. I looked at myself and you know, because you're, you're you're talking so much about the founder and about my father and about my mentor, and it just helped me reflect on the kind of leader that I am, and who I want to be and and how I want to continue to build the business and continue to lead the business with my sisters and and how strong we were as a family unit and, and I mean that in every sense. 

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We've been having family meetings every month since, I think I was like seven, like, I know we know them. We've been well groomed and how to run these meetings. But they were different, and it was just, it was more about, you know, appreciating where we've come from and taking that and where we're going to go as a family as well. And then we started talking about succession as a family. And now, you know, you look at it a few years later, and the president of our organization isn't part of the Hay family, per se. They're part of the Scandi family, and so that's part of those learnings, and that's part of the succession that we - this all brought up. And how are we deciding to, you know, go about succession, just like we did way back when, you know, 2530 years ago, yeah. So, yeah, just incredible learning, and it really brought us together and and again, finding that we were all very aligned on that vision and and how we're going to go into the next chapter of the organization.  

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Matt Knight  46:35

So moving onto the one other part, the big impact that Scandis had on the University of Alberta and ABFI, we've also been able to work on MBA business case that was published last year in Richard Ivy and Harvard. That was really cool to see. Tell us a little bit about that business case, and kind of you know, it was published on your family's journey. But what did that mean to you? 

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Russell Hay  47:01

Oh, it was significant. It was. It was so significant to us. And again, when you talk about learnings, it was, it was diving into, you know what? What we believe business should be like, what we believe family business should be like, what we believe government, governance should be like. And it was great to be able to tell that story, and whether it was right or wrong, it's what we've done, and it's what we believe. And it was just, it meant so much to all of us. And just, it was a great experience. But again, when you really look into your organization and you're talking about it, it helped us reflect on, okay, these are the systems that we're talking about. This is, this is how we're running our business. It's the structure of our business. But let's make sure that this is actually being active and operated accordingly. So it was a good opportunity to go back into the organization and make sure that everything that we say in terms of governments and what we're doing is actually happening and. And it was great, because it absolutely was and it was a great experience,

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Matt Knight  48:43

Nice, and you've been extremely generous with your time, and you've come into classrooms a couple times with us. What is it like hearing students kind of critique your strategy and your actions?  

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Russell Hay  49:04

I love it. I love it. I think that's probably one of my most favourite things to do right now, and I just did it a few weeks ago. Again, the engagement is incredible. And like we were talking about before, I love it when, when they're calling me out on the business, when I say something, and they're like, that's not what it says on your website. And you know, I appreciate that, because they've, they've taken the time to research the organization and look into the organization and understand it. So it's really neat that way. 

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But I love the idea flow, you know, talking about the organization, but it's, it's so much fun having that open conversation and question and answer, but more just a really good conversation about business and right now it's all about innovation and technology, but it's all the questions on family values and and corporate values, and really what glues an organization together. Those conversations are incredible. 

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And I love that you know people that are involved in business right now, you. I care about that so much. Care about the value of the organization. Care about the culture of the organization. Because, you know, you can ask any, anybody in my family, it's culture that's got us here. It's the people that got us here. So it's just, it's really refreshing to have those conversations and see how much they care about that, and are curious about the corporate culture, nice. So the student ideas are actually impactful and helpful. Like, oh yeah, 

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I'm taking notes. They're giving me little gems. So it's great. You know, as as we're going back and forth, and they, you know, when they're, you know, you always have your blind spots as well, and and when they're going through it and asking these questions, and you can take a lot of great feedback away from them, which I have, yeah, it's been, it's been really incredible for sure.

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Matt Knight  50:49

Cool. Okay, let's fast forward a little bit to more looking at kind of succession and Future Planning. So within the organization, within your family, what are you doing to kind of groom that next generation. 

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Russell Hay  51:02

Yeah, like we talked about before, we just did a major shift in the organization. Right now, there's been a huge focus on succession within the organization, which is setting us up really, really great right now for the next several years, but it's really we have, like a mentorship program that we're very focused on, and that is mentoring individuals in our organizations, from our owner operator groups to administrative to operations to executive level, on, on how they can continue to grow within the organization, and where that opportunity lies and and we, we realized about, you know, four or five years ago that we, we weren't doing that. We weren't communicating that correctly, on where somebody could go within the organization and what their future looked like in 15 years. And you know, we're lucky to have many individuals that have worked with us, you know, 15 years plus 20 years plus 30 years plus, and we want to continue that for the next generation, the younger workforce coming in. So we're very big on that mentorship program, so they can see what it looks like and how that road map to success and succession. What, what that can look like? For sure, it's very important to us. 

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Matt Knight  52:30

Yeah, they want to be able to see their future, whether you know, within the organization and beyond. Yeah, what's next for for Scandinavian, in terms of geography, service lines, technology?

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Russell Hay  52:42

So you know what we're, we're very excited right now in expanding, obviously our, you know, our eyes always on Canada. Right now, we're diversifying into a little bit of, little bit of different industries, one being education. So that's really exciting for us. And and then we're, we're expanding into the US, and we're being very focused on the approach right now, sports entertainment is something that we believe we are experts in our in our field. You know, along with, when you talk about grocery cleaning or retail cleaning, that's really what, what we focus on. And there's just, there's, there's, there's so much opportunity there, and but we're being very focused right now, and we've managed to to expand over the last year, and it's, it's just been quite successful for us. 

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So that's from an expansion perspective, through technology, I think we have strong relationships than we've ever have with our manufacturers and distributors, and, you know, our R and D division, it's, it's very intriguing to me. It's something that I'm highly involved in right now. And it's just continuously, how can we evolve our space?

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 And, you know, people don't understand the janitorial industry very well, right? They don't think about it, like you said, but educating them on on how this can be beneficial for, you know, ultimately, it's always for our customers, but then educating, you know, our cleaners, our owner operators, on how this is going to benefit them. So we just, we were very focused on that. And it's again, like we talked about education communication, and it's just really exciting, especially when you start seeing internal cleaners starting to adopt these new processes, because it's like anything else, if you've done something one way for you know, 20 years, it's hard to adopt a new way, and, and, and when you see them adopting it, because they they understand it, and they realize the benefit to them, it's it's incredible. And then obviously that translates right to the customer. And right to our management team. 

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Matt Knight  55:03

And then, you know, kind of the flip side of that, what do you think is the biggest challenge, you know, either for Scandi or for the industry over the next five years?

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Russell Hay  55:12

You know, I think the, I think, like anything else, is ensuring the standard of the quality and not allowing, you know, economics to always be a driver. I think that that is something that we need to make sure that we ensure is preserved, because quality and integrity is paramount. And I think, like in any other industry, that can be compromised. And right now, if I look at something in the next five years, that's that, that's what we definitely need to make sure, is of focus. And again, we're we're portraying the right messaging and and why it is what it is, or the costing is the way that it is, and and why it is so imperative, especially in our industry, from a cleaning perspective and a standards perspective. So I think that that is definitely something that we need to make sure that we keep our eye on. 

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Matt Knight  56:16

That makes sense. I guess we're trying a new segment. I was going to do it in the middle of the episode, but I forgot. So we're doing kind of bit of a lightning round. So super quick questions. You can't take a lot of time to think about them. You can't take a lot of time to respond. 

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Russell Hay  56:29

Perfect. Okay, let's go. 

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Matt Knight  56:31

So first job you paid someone else to do after becoming president?

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Russell Hay  56:35

After becoming that I paid somebody to do in Scandinavian, yeah, after becoming president. Hiring a new EA,

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Matt Knight  56:48

You know the 4am or midnight site check or emergency call, love it or leave it?

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Russell Hay  56:55

Leave it. It's about honesty right now,

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Matt Knight  57:00

Not the robot, although maybe it is a favorite piece of cleaning gear or equipment or technology?

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Russell Hay  57:05

Backpack, vacuum, 100% all day long. 

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Matt Knight  57:08

Nice. Okay, best advice your dad ever gave you in one sentence?

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Russell Hay  57:15

Always be good to your people.

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Matt Knight  57:17

Nice. Next city you want to see, Scandi in?

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Russell Hay  57:22

Tampa Bay.

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Matt Knight  57:24

Awesome. So we're gonna kind of wrap up with a couple lessons learned and closings here. You know what are kind of some of the top lessons, and I know you just mentioned that one from your dad that you would share to a next generation family member that might be joining their family business?

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Russell Hay  57:39

Understand the expectation. And I think in understanding the expectation, it's if you really want to be involved in it, you want to excel in it, and then you want to make a career out of it, you you really have to understand that it's a lot of hard work, and there's a ton of sacrifice to be able to do that, and it's a balancing act, not only from a professional side, but a personal side, family side. And I would, I would just make, I would definitely make sure that one understood that's what they were getting into, because it is as fantastic as it is, you really need to know, because the buck stops at you. And if you want to be a part of that family business, you have to, you're the one that has to lead by example. So when you talk about, you know, I'm saying, leave it the 4am or, you know what? I mean, it's, you know, for many, many years, that was a daily thing, the four AMS. And that's difficult, because that's just part of growing within a family business.

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Matt Knight  58:44

Yeah, that makes sense. What makes you most proud of your family business or business family journey so far?

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Russell Hay  58:51

I would say the Scandi family itself, I our culture is is so strong, and the foundation of that, and the way that we all communicate, the way people feel within the organization, is, is truly inspiring and and I love that, and I think that is, you know, you can look at all the technology and all the different programs that we have, but that is really where everything stems from is, is the culture of the organization. Yeah, 100%.

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Matt Knight  59:23

No, that makes sense. And then I like to ask this question on most episodes, most of the time I remember, but kind of favourite educational experience or book that you know that most shaped your professional or personal approach, that you would recommend? 

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Russell Hay  59:38

It's easy, Good to Great. I think that was very inspirational for me, and that's that's guided me. I think that was inspirational for our family, yeah, and it really helped guide us in how we conduct business, yeah, that was a huge one for me, for sure. And you know what Good to Great is, you know, the last you know, when. We were looking at, was it a couple years ago, and what our vision was, you know? And you know, the book was written a long time ago, but it was very much looking internally, and it was about stabilization, and it was really about bringing our company from good to great, but looking back and saying internally, saying, you know, what, we believe we are great now in what we're doing, in our process, in our programs, everything that we're doing. And we were focused on that for two years, and I think we came out of that in an incredible way. And looking back at it, and when we're, you know, at our last conference, internally at Scandinavian. It felt pretty great. So that was, that was big for us.  

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Matt Knight  1:00:03

Nice. I think that's a pretty good place to close. But before we do anything, you know, any questions you wanted to answer or anything, thing that you wanted to say that we didn't get to? 

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Russell Hay  1:00:35

No, I, you know what? I enjoyed this tremendously. It was fun. I love, I love talking about the organization. Love talking about our people. Love talking about technology in how it's affecting Scandinavian in an incredible way. But no, this was, this is fantastic. I really appreciated the questions and the time. It's been a lot of fun, awesome.

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Matt Knight  1:01:16

Well, thank you so much as we close off, thank you very much, Russell for spending time with us today and sharing you know basically how your family has taken this very, very simple cleaning business into this amazingly complex, national, multinational, technology driven organization, without losing its roots or its culture. And if anything, its roots and culture is what makes it special, and if any of these you know. And the other thing I wanted to say as well, you know the impact that yourself and your family and Scandinavian has had on ABFI and the university has been incredible. And just want to thank you for the support that you, that you've provided to us, and just your time and generosity and generosity and help helping us and challenging us to be better as an organization as well. 

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Russell Hay  1:02:06

Oh, thanks. I appreciate that. Matt, 

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Matt Knight  1:02:08

Yeah, so this has been another episode of Table Talk with ABFI. Once again, I'm your host, Matt Knight, we're joined today by Russell Hay with Scandinavian Building Services. If you want to learn more about ABFI programs or our signature event or other signature families like the hay family, visit abfi.ca thanks again for joining 

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Russell Hay  1:02:31

Awesome. Thanks for having me. This is fantastic.

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