...showcase for energetic knowledge transfer. It stands in stark contrast to the nearby executive headquarters on 99th Street, which is a typically plain, contractor-style building.

PCL hires experienced recruits from other companies, but the devotion to the PCL way is so great that the company prefers to hire young people before they have had a chance to develop too many bad habits at other companies.

One recent recruit is Myke Badry. He doesn’t look like a company man, but rather like he is as ready to front a rock-and-roll band as help build a rapid-transit system. But he exudes confidence and passion for his work. Badry has an engineering degree from the University of Alberta, and his father was a mechanical contractor who speaks respectfully about PCL. “Everybody had great respect for PCL, and they had great concern for safety. If you were a subcontractor working for them, you didn’t worry about getting screwed,” says Badry’s father.

Myke Badry gives the impression that Edmonton is PCL’s town. “All the kids who were into construction wanted to work for PCL,” he says. Badry had been working for Stantec Inc., the big engineer headquartered in Edmonton, but he was more interested in construction. “My personal goal is to always push myself to the next level,” says Badry, who says he is not interested in managing construction of a strip mall or convenience store.

"PCL’s U.S. buildings profit margin is greater than the 3% to 5% some firms earn." —   Peter E. Beaupré U.S. Buildings Chief

Fortune magazine rates PCL as one of the best places to work in its annual ranking. Grieve, the son of a Winnepeg spray-paint-equipment salesman, says that personality of a worker has a lot to do with whom PCL hires. “The technical skills are teachable,” he says. “The question is how good will they be working with others. It’s hard to impact a person’s fundamental personality traits.”

Differing Views

One difference between PCL and Kiewit is diversification strategy. In addition to contracting, Kiewit has been involved in gas supply and broadband cable lines in a unit called Kiewit Diversified, which was spun off. The entrepreneurial spirit in Omaha ranges further from the contracting core. And Peter Kiewit Sons’ Co. shareholder-employees have had opportunities to profit in these ventures as they were given shares in ventures that were spun off.

PCL so far has stayed closer to its core. Douglas says PCL’s board, comprising top executives and some retired executives, had thought about  forming new business entities to pursue non-core ventures. “We’ve examined the Kiewit model” of starting non-core ventures and considered different ways of doing it, he says. “If you keep [those business ventures] separate, then you’re playing with play money and investing money that doesn’t impact the core.”

When, in 2003, the directors considered whether PCL should set up something formal to pursue non-core ventures, the issue of how to divide ownership in such a company became complicated.

They decided to stick to the guidance of Poole’s Rules. Rule No. 3 is blunt and presumably directed at managers: “Avoid sidelines.” If that is not clear enough, rule No. 4 is: “Do not permit sidelines by employees.”

In some companies, managers allow diversification to destroy the value of otherwise profitable businesses. Examples include bad real estate investments in the 1980s of Perini Corp., Framingham, Mass. The investments took years to un­wind.

Still, academic studies have shown that diversification from a company’s core can add value. Turner Corp., for example, makes a lot of money in non-construction operations. Industry sources say the sticking point is how “core skill” and “sideline” are defined.

PCL does not care. Says Douglas, “If you come back to our roots and culture, one of Ernie Poole’s rules is, ‘Don’t have sidelines,’ and I’m a big proponent of that.”