When Family Means More Than Blood: How Scandinavian Building Services Redefined Succession
When Russell Hay appointed Mamdag Do as president of Scandinavian Building Services—the first non-family member to hold the role in the company's history—he knew he was making a statement. After 25 years with the company, Do wasn't just an employee; he was family. This decision illustrates how successful business families expand their definition of leadership succession beyond bloodlines to embrace what Russell calls the "Scandi family."
The janitorial services company has grown from a single truck operation in 1956 to a coast-to-coast enterprise with over 8,000 cleaners maintaining 160 million square feet daily. Yet their most significant transformation may be how they've reimagined family business succession for the modern era.
From Property Management Pain Point to Industry Revolution
Terry Hay never intended to enter the janitorial business. Working for a property management company in Yellowknife in the early 1980s, he faced a persistent challenge: finding reliable cleaning services. "He couldn't find consistency. Couldn't find efficiency, and it was just always a fight for him," Russell explains. When Terry and his wife Wilda moved back to Edmonton, he saw an opportunity to revolutionize an industry he considered "just so archaic."
The turning point came with contracts for Northlands Coliseum and West Edmonton Mall. "If you can clean a sports and entertainment center, you can pretty much clean anything," Russell notes, "because you usually have very tight time frames in which you need to clean it up." These high-profile contracts established SBS's reputation and provided the foundation for national expansion.
Terry's innovation focus extended beyond operations to quality assurance. SBS became pioneers in electronic quality control systems, laying groundwork for today's technology-driven approach. "He was one of the pioneers to go to electronically quality assurance programs," Russell recalls, emphasizing how his father's forward-thinking approach shaped the company's culture.
Technology as Competitive Advantage
Today's SBS operates at the intersection of traditional service delivery and cutting-edge technology. The company's proprietary ScandiTrack system captures data during every cleaning, providing customers complete facility transparency. "We know exactly where they are, how long things are taking," Russell explains, describing how beacon technology tracks cleaners throughout facilities.
The system uses machine learning to customize user experiences, showing facility managers information most relevant to their priorities. This data-driven approach has reduced customer communication needs by 50% while improving service quality and accountability.
SBS also leads Canada in janitorial robotics implementation, working directly with manufacturers to refine automated cleaning solutions. "We have the largest volume of robots at any given time throughout Canada," Russell notes. Rather than replacing human workers, these technologies augment cleaning capabilities while providing valuable performance data.
Redefining Family Business Leadership
The appointment of Mamdag Do as president represents more than succession planning—it demonstrates how family businesses can maintain their values while expanding leadership opportunities. "It's not about the Hay family, it's about the Scandi family," Russell emphasizes. "When people look at Scandinavian, they see Mamdag Do as part of the Hay family."
This decision was strategic, driven by organizational needs rather than tradition. Russell wanted to focus on working "on" the business while ensuring qualified leadership. Do's 25-year tenure and deep understanding of company culture made him the natural choice. The appointment sent a powerful message throughout the organization about advancement opportunities.
"It really showed our organization that there is opportunity. There's continuous opportunity within the organization. You don't have to be a family member to lead the organization," Russell explains. Multiple promotions followed Do's appointment, demonstrating the positive impact of inclusive succession planning.
Pandemic Resilience Through People and Purpose
COVID-19 tested SBS's organizational strength and accelerated growth plans. While other industries contracted, essential cleaning services became more critical than ever. Russell describes the dedication of cleaning staff who continued working when "everybody was running out of these facilities" and "our people are going into them."
The pandemic accelerated SBS's expansion into every Canadian province and territory while diversifying into the U.S. market. "We were able to accomplish that through the incredible hard work and dedication of our cleaning staff," Russell notes, highlighting how company culture enabled rapid growth during challenging circumstances.
Leadership Lessons for Family Enterprises
Russell's leadership philosophy centers on empowerment and macro-level management. "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 excel they will," he explains. This approach differs from his father's more hands-on style, reflecting generational leadership evolution.
Key elements include open dialogue across organizational levels, valuing the best ideas regardless of source, and fostering collaborative environments. "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."
Strategic Takeaways for Business Families
SBS's journey offers several lessons for family enterprises navigating succession and growth:
• Expand family definitions: Consider long-term employees as potential family members when evaluating succession options • Embrace technology strategically: Use innovation to augment rather than replace human capabilities while maintaining service quality • Prioritize culture: Strong organizational culture enables both succession flexibility and rapid growth during challenging periods • Plan succession proactively: Early succession planning allows smooth transitions and demonstrates advancement opportunities organization-wide
Looking Forward: Innovation Meets Tradition
As SBS continues expanding into the U.S. market and diversifying into new industries like education, Russell maintains focus on quality and integrity. The company's success demonstrates how family businesses can evolve their succession approaches while preserving core values.
"Our culture is so strong, and the foundation of that, and the way that we all communicate, the way people feel within the organization, is truly inspiring," Russell reflects. This foundation enables continued innovation while maintaining the family values that drive sustainable growth.
For business families considering succession options, SBS proves that expanding beyond bloodlines can strengthen rather than dilute family business identity. When family means more than blood, leadership possibilities become limitless.
Ready to explore succession planning and family enterprise leadership? Watch the full Russell Hay episode on YouTube or listen wherever you get your podcasts. For deeper insights into family business innovation, visit our Table Talk podcast archive at abfi.ca.
Content Index: Russell Hay SBS Blog, Business Family Insights Team, September 2025, Podcast, Succession-Innovation-Leadership-Technology-Governance, Table Talk S1EP15
