HDR

An Interview with Richard R. Bell, Chairman and CEO of HDR Inc., and Inductee in the Omaha Business Hall of Fame
By Carl Sansom and Andrew Sherwood, Creighton University MBA students

“Always tell the truth, then you never have to remember the lies.”
-Words of wisdom from Mr. Bell’s grandmother.

The Man

After receiving a master’s degree in engineering from South Dakota State University, Richard R. Bell decided to serve his country and expand on his skills in the U.S. Army. After a few years in this service, he decided to go into the private sector for engineering.

Mr. Bell is originally from the Midwest, so he wanted to return to the general area. He originally looked for opportunities in Minneapolis, Omaha, and Kansas City. In Omaha, in 1974, he was able to interview at HDR and ended up with a job as a project manager in waste energy, charged with turning garbage into electricity. The first department he took leadership of with HDR was TechServ, in 1985 (environmental/waste treatment).

In 1983 HDR was bought from the original ownership. After HDR was bought-out there were some major changes made to the leadership in the company. One major change took place as thirty-two managers went on a trip with the new owners and less than a year later only four remained with HDR. As one of the four remaining managers, Mr. Bell was asked to take over the engineering side of HDR in 1988. From there he was promoted to Chief Executive Officer of HDR Engineering, Inc. in 1989. Mr. Bell led the company buy back in 1996 and was then appointed to his current position of President and Chief Executive Officer in 1996. While he had the drive and intelligence necessary to succeed, he credits part of this climb to being in the right place at the right time. He was running a small group, and his group was one of the few successful groups, so it was an easy choice to put Mr. Bell in charge.

Mr. Bell is a strong believer that “leaders are born.” You can learn things, but there are natural characteristics. On the topic of leadership Mr. Bell said, “Today you have to lead by example...You have to motivate people to buy into the program.” He expounded by saying communication in your organization is key to getting everybody on board to achieve goals. Mr. Bell also said, “I surround myself with people that can get me answers” when there is any gap in his business knowledge.

In following these principles, Mr. Bell was able to grow as a leader while HDR was growing as a company.

Mr. Bell’s leadership capabilities can be summed up in a Fortune Magazine list given to Mr. Bell by Tom Sanders, senior vice president at HDR.

Mr. Sanders told Mr. Bell, “These are exactly what you are.” Since then, Mr. Bell has used this as an internal checklist to make sure he continued to lead as he should.

The Company

HDR was started in 1917 by H. H. Henningson as an engineering company, primarily designing water and sewer systems. The company had continued growth from the start, with some notable advances occurring in the expansion and creation of new departments. In 1955 the architectural department was added to HDR. In the 1960s HDR entered the healthcare facility design field, and in the 1980s there were more increases in waste management.

In 1983 Bouygues SA, a large French construction company purchased HDR. Foreign ownership continued until 1996, when the employees of HDR purchased the company back from Bouygues SA., led by Mr. Bell as noted earlier. Various market and parent company conditions created an opportune time for this buy back to happen. The parent company was working on an extremely large European project, creating a demand for capital, and the company was going through leadership changes. All of which lead to a change in the company’s future plans. Mr. Bell noted that the employee

purchase was an accomplishment that was likely overdue, and accomplished largely because of the situation, “Right place, right time.”

After the conversion from foreign ownership to employee ownership, the company flourished. All employees were given an equal opportunity to buy into the new employee ownership program. This ownership was distributed over the course of seven years. Employee ownership helped to encourage everyone to work together. This ownership mentality is vital to HDR operations ethically, as well as for profitability.

The Ethics

Mr. Bell believes he has had ethics and morals as part of his personality from his very roots. Growing up in a character building small town, and living next door to his grandmother, has given him the unique opportunity to always be expected to do what is right.

“I didn’t have to be taught ethics, I grew up in a small town, and my grandmother taught me, always tell the truth, then you never have to remember the lies...Tell the truth and the truth will set you free,” says Mr. Bell.

These core values of honesty and doing what is right have translated exponentially to the success in his career and in the company he leads.

“Everything we do, I want to be able to read about in a positive light on the front page of the Omaha World Herald.”

A great reputation is key to sustainable and continually progressing success at HDR. Mr. Bell has never wavered from this principle in any of the company’s transactions including the company buy-back, to acquisitions, and down to internal and relationship related decisions.

In one example, a close employee asked him up front about a promotion opportunity. Mr. Bell gave a non-revealing answer in interest of not breaking a relationship with disappointing news. A few days later the same employee came to him and “really hammered” him about the promotion. At that point Mr. Bell decided that next time a situation like this occurs, he will tell the truth so he would not have to worry about it later.

“I am not in the business of making people feel good, they don’t have to love me, they have to respect me.”

In relation to ethics in major company decisions Mr. Bell said, “We did the right things at the right time for the right reasons.”

When Mr. Bell was asked about opportunities when the less ethical choice could have led to increased profits, he replied, “No. Short term gain, long term loss...Even at the expense of profit, we do the right thing at HDR.” He explained that decisions made at HDR are set on the long term goals of the company. Due to the cost of obtaining new clients, it is important to serve clients in a way that can guarantee repeat work. The evidence of this practice is in the number of clients HDR has been working with for over forty years.

HDR has shared RRB’s “Ten Rules of Success” to help instill an ethical and profitable mindset for their employees.

HDR has had great growth and profit while always choosing to do the right thing. Mr. Bell, rightfully, is not shy to express that HDR is a business and “we are here to run as such.” While making good ethical choices certainly plays a big role in the company culture, everyone is on the same page where making sustainable growth and profits are the goals, and they have done just that.

In Conclusion

Mr. Bell is set to retire at the end of 2011, and his successor is set up for success. “The management team is built strongly... It’s time to transition.”

In response to a question about his legacy, Mr. Bell said, “People have to judge your legacy, I just have to do what I think is right... We have a culture (at HDR) that can sustain itself, and I would be disappointed if he didn’t (continue success).”

George Little has been named to succeed Mr. Bell as the new CEO.