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Episode 48: Election Impact on UVM Infrastructure w/ Leslie Kass

Episode 48: Election Impact on UVM Infrastructure w/ Leslie Kass

Welcome to the 48th Episode of Trees & Lines: Fresh Perspectives on Utility Vegetation Management

Trees and Lines Podcast – Episode 48

Join Iapetus Infrastructure Services (IIS) COO Tejpal Singh and Principal Advisor Dr. Phil Charlton for a conversation with Leslie Kass, CEO of Lewis Services.

Episode 48 Transcript

Tej Singh: Welcome back to the Trees and Lines podcast. Today, we’re talking with Leslie Kass, CEO of Lewis Services. We covered a range of topics with Leslie in what turned out to be a fascinating conversation. We delved into Lewis’ ESOP structure, discussed the potential impact of this election year on US infrastructure, and highlighted all the great work that Lewis and their team are doing in the market. So, take a moment to listen. It was a pleasure having Leslie join us. Enjoy.

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Welcome to another episode of Trees and Lines. We’re thrilled to have Leslie Kass, CEO of Lewis Tree Services, with us today. Leslie is an exceptionally experienced executive in the energy engineering sector. Formerly the CEO of Babcock & Wilcox, she has been at the helm of numerous firms within the industry. Leslie, it’s great to have you here. Welcome.

Leslie Kass: Thank you, Tej and Phil, for having me. It’s a pleasure to be here with you both today.

Philip Charlton: Welcome, Leslie

Tej Singh: Leslie, you’ve been at Lewis for a couple of years now. You’re two years into this opportunity. How’s it going?

Leslie Kass: Oh, fantastic. I’m just blessed to be in this space and at this company. It’s been a real treat to participate in the industry, and Lewis was built on such a solid foundation. I’m lucky to be here.

Tej Singh: Lewis has been around for about 85 years, and Babcock, as you know, was around for 150 years. You’ve built a good reputation for stepping into these well-established organizations. Is it a little daunting when you first step in because there’s so much history to work with, or does it give you some comfort that there’s an established foundation that you can then build upon to continue leading the company?

Leslie Kass: In all those cases, it’s been such an established brand in the industry. B&W is just iconic, and Lewis in this space has such a great brand. To be able to take that and usually make little modernizations and updates where we need to catch up and keep up, those are great opportunities. Those are things that are within your control that you can go and help the organization to tune up and continue to grow, versus having to do that first “Hey, we’re here. We matter. We’re relevant.” All that’s behind you, and it’s really just about capitalizing on the good reputation that you’ve built. It’s probably a little easier, from my point of view. That’s easier than starting from scratch, but maybe it’s all that I know.

Tej Singh: Is this the first company that you’ve led that’s an ESOP?

Leslie Kass: Yes it is.

Tej Singh: Tell us a little bit about that. First of all, I think it’s a very interesting structure. But for those listening, could you take us through the structure, some of the nuances, and what it’s like to lead an organization like that?

Leslie Kass: It’s so much fun. That’s one of the things that really attracted me here once I figured it out. Very few people have friends that work in an ESOP, and that’s one of our challenges with our employees: getting them to understand the value of the ESOP. Once you’ve been here for about 500 hours, every hour after that, you are building your retirement fund. Our union partners have their pension, but then for every other employee here, they’re building their retirement fund with their little piece of the company.

So you will continue to build and create that security that’s game-changing for families, in addition to a 401K match. But then we’re working with and for each other, so the attitude is very different. That’s our truck. These are our customers. This is our company and our dollar, our ESOP dollars. You find folks are very creative in ways to cut costs because it’s their money, not because it’s the company’s, and we go, we yell at them and say, “Hey, you need to be frugal.” It’s because they say, “Hey, this is our ESOP dollar,” and I want to talk about the deal I got with great excitement because every dollar we save goes into everyone’s retirement.

Then as a leader, it’s phenomenal because I can focus on two things: my customers and my employees. I don’t have to serve someone else’s need for a return, someone else’s need for the market. As a publicly traded CEO, you spend a couple of days a quarter completely immersed in just explaining your story to investors, much less writing that story, reporting on that story, making sure you’re within all the disclosure, and it’s maddening, all the things you have to do just to keep that machine running. All that time is given back here.

From a planning perspective, because we’re not on a timeline to return for somebody else, perhaps a private equity, we just think long term. So if there’s a little dip in the market, but we can take advantage of it, we can do that because I don’t have to demonstrate something every single quarter, and it just frees up space and time to be creative and think long term like I haven’t found anywhere else. I guess maybe for a private owner you can, but certainly in a structure like this, it’s great.

Philip Charlton: I imagine your employees who have been around for a long time understand it. But most employees aren’t in that kind of arrangement. How do you bring them up to speed and get them invested?

Leslie Kass: It’s storytelling. It’s almost like safety: make it personal, make it real. That’s one of the things we’re working on right now, to have folks who’ve been here for a while who are planning how they’re going to use their ESOP dollars, or who have just retired and said, “Do you see this boat? This is my ESOP retirement boat that I bought myself. Do you see this?” We had at our annual meeting one of our employees who had just been in a clerical position in the building, and she retired. She told the story with tears in her eyes, saying, “I thought I was going to have to take a part-time job in retirement. My financial advisor said, ‘Sue, you can buy a new car. You should travel. What are you talking about?’” And the change that was for her and her outlook and what she’s able to do, with that, folks went, “Whoa, did you hear that story?” Then you go and you explore more. But it’s really got to be the folks that have been beneficiaries telling others, I think, to have it really stick.

Philip Charlton: What a message coming out of your office staff. It changed her life. That’s pretty cool.

Tej Singh: I think 4,000 employees—is that where you guys are right now? Talk to us a little bit about what you see, with fresh eyes coming into this space. As I feel, the market in line clearance and storm response is very controlled by a handful of companies. Your competition is also these other sizable, very historic businesses. From a point of differentiation, from kind of separating from the market, doing different things, creating new value for the market, what is your game plan? Without obviously telling your competitors what you’re going to do, but just from a very high level, what are you guys trying to accomplish right now from this point forward?

Leslie Kass: Well, I think it’s really about continuing the Lewis brand. We grew, and my predecessor, Tom Rogers, along with Dennis Brown and many others, expanded this business based on the principle that good work leads to more work. We’re committed to delivering what I like to call the Lewis experience or the customer promise, ensuring that clients get what they pay for without any headaches. Our utility partners don’t get paid to deal with the headaches we might give them. Imagine, Phil, you’ve been in this business for a long time, but when you’re in a homeowner’s yard, your ability to create headaches is very high. You get opportunities every day to create a whole ton of headaches because you’re dealing with reliability, homeowner’s yards, and safety. If we can deliver on that, then we can continue to develop leadership so that we can grow and deliver the Lewis experience in other places. We can only grow as fast as we can build our leadership bench, so we’re very focused on that and on finding sources of leadership. I was at Veterans in Energy last week to ensure that we continue that pipeline and diversify and build our workforce, taking on skills from outside our industry so that we can grow even further. We can’t homegrow them fast enough to keep up with our growth.

And then there’s technology—it will be done with you or to you, and we’re going to choose with you. It’s coming. You heard it on your podcast recently with Cindy from Rappahannock. We need to understand how that affects our work and how we can be a partner in executing and delivering as the view on how we trim and where we trim changes. What can we do to make that more efficient and stretch every dollar to get as much trim as you can for the folks we have out there? It’s an exciting and dynamic time.

Philip Charlton: The industry is becoming increasingly data-driven, and technology will be a key component. How are you adapting technology to your operations?

Leslie Kass: We’ve got a learning management system and iPads out there, kiosk iPads. We’re training people and figuring out other ways to collect data. We’re installing additional technology on our trucks right now. We’ve got in-cab cameras, but we’re also collecting additional data to reduce windshield time and make us more efficient. How can we continue to look for opportunities to do more things while we’re out there? While that truck’s rolling, what else can we do? Because I don’t know about you, but the robot with the chainsaw is not showing up in my yard anytime soon. There’s a certain part of this business that, I think, for a long time, we’re still going to need climbers to do that delicate work in roping and rigging because we have structures out there. So I love it because the industry will be here, there’ll be some change, but there’s still a desperate need for what we do. It’s not going to go away.

Philip Charlton: How are you finding the new employees? Everyone is complaining about a workforce that’s hard to keep up with what’s out there.

Leslie Kass: It is challenging. As an industry, we need to tell the story of the outdoors, the appeal of not being confined by four walls. As my colleague said, if you want a new view every day, join us for a rewarding and challenging career. It’s a hard day’s work, not for everyone, but it’s also hard work bussing tables. You could work with us, be outside, build a retirement, have benefits, and we need to sell the story, the purpose, and the mission. Our folks love storm duty because it’s rewarding to help a neighborhood and feel like you’ve done something good. We don’t get the credit we deserve, but we do good every day by maintaining the reliability of electricity for our customers. It’s about working together with organizations like the Center for Energy Workforce Development, Veterans in Energy, and UAA to tap into new labor pools. I spoke with a division manager at a high school job fair, and that’s great. We need to be out there, giving people options, because until I came here, I had no idea this work was even being done. Education is the first step.

Philip Charlton: Most in our industry got in it without knowing that there was an industry there.

Tej Singh: Leslie, grid resiliency is obviously a topic. There’s an incredible amount of stress on the U.S. electric system. The infrastructure is vulnerable; some would call it decaying. The reinvestment in that is expensive. It’s happening. It’s necessary, even as you start thinking about electric vehicles and microgrids and how all that’s going to create different types of stresses on the system. When people think of Lewis, line clearance comes to mind. That’s kind of your core business. Have you thought about or are you thinking about, without having to disclose anything here, other things that you may want to do as it relates to grid resiliency? Like, are you guys thinking about expanding your offerings, or are you going to continue to be more dominant and attempt to be more dominant in your core offering?

Leslie Kass: Well, I think you’ve probably noticed we went from Lewis Tree Service to Lewis Services because, as I like to say, what else can you do with muscle and trucks? We’ve conquered some of the most difficult parts of the distributed workforce with great labor that we can train to do lots of things, and having that fleet out there, so we’re definitely looking at what else we can do. We do see that the number and types of work—I think it drives my team crazy—but there are some poles right outside my window here where I’ve watched them do a tremendous amount of upgrades to serve a new huge apartment complex for Rochester Institute of Technology that’s right down the road, and seeing how many different vendors are there and the types of work they’re doing. Some safety practices are better than others. We could do that better. So, thinking about what else we can do to support the industry and to diversify our offerings and be more valuable to our customers is definitely something that we think about.

Tej Singh: You’re in 27 states, something of that nature. Is that distributed fairly evenly across the US, or do you guys have more regional concentrations where you’re bigger? Where are you and where are you not?

Leslie Kass: I think we go as far west as Texas, then kind of up the Mississippi and back east. We, of course, have a concentration in the Northeast, which is our historical base in New York. Then it’s interesting; we go down and spring up in pockets of places where we’ve worked historically and some of the bigger cities. We’ve got some new contracts we’re really excited about that expand to new areas. So we’re a little bit of everywhere and concentrated in a handful of places. It’s a great platform to build from because there’s so much connectivity, and there’s some of that white space where we can continue to fill in. Then you can work with customer budgets. When one’s down and one’s up, and you know how it is with the PUC, things tend to change, and we can support all those munis and co-ops along the way who need the service. It’s nice to have a geographic footprint where you can swing in and out of different customers, and that’s part of the secret sauce of delivering that Lewis experience. You can’t just hire random people in a random place and expect to have it happen.

Tej Singh: Absolutely. I ask because in your previous leadership roles, I know you spent some time in Canada, and we’ve been having chats with people internationally. Vegetation management and utility services are not just limited to North America. Considering what we saw in Hawaii and in Europe this past summer, are there any plans for you, or has anything piqued your interest to look at global expansion as well?

Leslie Kass: I think right now there’s so much opportunity in the U.S. We will be open to that, and certainly not too far afoot. I’ve worked in a full global business, and I’ll be honest, not having to wake up in the middle of the night for a call to your customer in the Philippines is really nice, or Vietnam, or somewhere like that, but just really offset, or Egypt. Anyway, I don’t miss that. But I do think within North America, there’s a ton of opportunity. Even, like I said, in the U.S., there’s so much opportunity because you’re not going to really get a new right-of-way. So what are you going to do to take this one and optimize it? That’s going to take years to continue to build all that out.

Philip Charlton: You’ve mentioned the diversity of services, which naturally leads to the need for a diverse workforce. How are you going about reaching and bringing in diverse groups, such as Hispanic workers, who are a growing part of your workforce? What’s the strategy?

Leslie Kass: First, if you can see it, you can be it. We have a diverse board that demonstrates that individuals from different walks of life and backgrounds can achieve anything in our company. We continue to provide leadership development and training at all levels, and then we recruit. We have a Director of DE&I who is helping to educate us to ensure awareness, so that everyone feels included and we don’t accidentally create barriers or make someone uncomfortable, mainly due to a lack of understanding.

We’re all about the people, but it’s possible to alienate a group or make them feel unwelcome simply because we don’t understand their customs or what matters to them. We’re working on language inclusivity, both Spanish and English. I’m learning Spanish, and we’ve got some folks learning English, to ensure seamless communication. All of our materials are available in both Spanish and English to ensure that the message is clear and that folks don’t have to work hard to understand what we mean, especially regarding safety.

There are many opportunities, and I think there are many untapped sectors of the workforce, particularly women. We’re making inroads, but like the whole energy industry, it’s not a joke—it’s a success. I complain, but when there’s a line at the women’s restroom at an industry conference, you think, ‘Well, ladies, this is progress.’ We’re getting there. I used to be in there by myself, so it works.

Philip Charlton: That’s a positive spin there. I like the “if you see it, you can be it” because for a long time, we talked about diversity, but then all the advertisements, all the pictures, everything was anything but diverse. You can talk about it, but it’s so much more helpful to see it.

Leslie Kass: Yes.

Tej Singh: Leslie, this is obviously a very important election year for many reasons, particularly regarding the discussion of infrastructure. Have you started to consider what the implications of an administration change might be for your sector? Is it a positive, a negative, or basically no change? How closely are you watching the indications and what the impacts could be based on who’s in office come November?

Leslie Kass: For our utility executives, it could be a significant change. The mandate will likely shift. However, the focus on reliability isn’t going anywhere; that work will continue. There’s no doubt about grid hardening as we progress with electrification. I recall a CEO mentioning, two years ago, how a power outage ten years prior was a minor inconvenience: you simply didn’t open your fridge and played cards by candlelight, which everyone found somewhat enjoyable. Now, a power outage means you can’t work, your electric car won’t run, and your world comes to a halt—heaven forbid, your teenagers’ phones drain. The world stops, and it becomes a completely different situation. This is evident in how utilities respond to outages and the public pressure they face, and this dynamic is here to stay.

Regarding infrastructure, I anticipate a definite pivot, possibly from a cleaner energy mandate to one more focused on electron flow. This shift could impact the ancillary aspects of the business where we operate. We observe and will support whatever construction is desired. However, from a utility perspective, they must determine the best use of their capital and how to plan. Planning long-term infrastructure based on a short-term agenda is challenging, and they face this task daily. It’s essential for them to partner with their states, rather than at the federal level, to decide what actions to take within the state to maintain grid stability and ensure the flow of electricity. Nonetheless, it will be a challenging endeavor for them.

Philip Charlton: What else do you see coming out of the C-suites of utilities that will be driving you and Lewis in the future?

Leslie Kass: Technology is the key—they’re seeking ways to extend their dollars, particularly in maintenance. How do we maximize reliability for every dollar spent? Fortunately, we understand that no matter the investment in hardening, if the trees aren’t managed, it’s futile. We’ll likely continue to receive a portion of that spend, but the goal is to partner with them to ensure those dollars are as effective as possible. Understanding their direction with technology and data is crucial to maximize these efforts. Great ideas may originate in the ‘ivory tower,’ but they come to life in the field with us. Our role is to ensure these ideas are practical and sustainable in the long term. After all, trimming every protruding branch is the most costly and inefficient method.

Tej Singh: Philosophically, with technology, there’s obviously a huge number of sophisticated technologies in this space, whether it’s collecting data, analyzing data, apps, and so on. Historically, has your modus operandi as a business leader been a partnership strategy with best-in-class tech partners, or do you prefer to build something in-house, branded with Lewis, where you control not only the data but also the impact, and can scale and adjust as needed? Or is it a case-by-case basis approach? What has been your general historical approach?

Leslie Kass: Yes, my view, especially here, is to partner because that is a whole different animal. It’s great because when I talk to folks that we’re piloting various technologies with and say, “Hey, listen, I have no interest in building what you build, but I can tell you what happens in the real world with our team.” I go out in the field with you and explain this. They have no interest in hiring craft labor and getting trucks, and were like, “Yeah, this is terrifying to me. This is outside and in the woods and all. I’m an inside kind of guy. I want to spend the weekend inside.” Perfect. We have the perfect marriage here. I’ll do the thing you don’t like. You do the thing I’m not really that awesome at. But it creates a great partnership because when those folks realize the power of actually seeing it from the ground and getting that feedback from the people who do the work, it makes the product that much better.

Tej Singh: In your first couple of years, can you maybe highlight something for us that kind of shocked you? Maybe surprised you? Complexity, an industry norm, something that you were like, “Oh, I didn’t realize that. This was very unexpected.” What is something that has kind of shocked and awed you a little bit?

Leslie Kass: No matter how global B&W is, you can still reach everyone in a Teams meeting. If you want an all-hands meeting, you can have one. However, it’s not the same out in the truck at the end of the day. The reliance on our first-line supervisors to carry the message, our general forepersons to convey it, and being so distributed, just understanding that their experience at Lewis is really about their local leadership. That’s what Lewis means to them. So, we make sure we’re relentless about training, equipping, and helping that local leadership to be successful, so those employees want to be here and want to work with us.

Having it so distributed was shocking. I tell everyone at the interviews here, “Look, you have to understand you’re not going to be able to just send out an email and everyone’s going to read it. That’s not how we roll.” But in the same way, it’s really powerful. Being able to go out and spend time with our crews and say, “I’m here in your office today, I don’t want to hear about what you do and how you do it, and how you’re going to keep each other safe,” that’s a great tool to show them that we care and it matters. It makes us all in leadership here better because we get what it’s like—you know, like the ivory tower people again, right? You have to understand what they’re really going through. So no one here in the office complains about the HVAC. You think you’re cold?

Philip Charlton: It’s nice to hear you recognize the local supervisor. They are key to so many things that we try to get done.

Leslie Kass: It’s the toughest job in any company, really, but with our distributed workforce, they really have to wear a lot of hats. I admire them.

Tej Singh: Leslie, Phil has certainly educated me a lot about the importance and the diverse individuals who are making a real impact in this space. Something that stood out to me, being fairly new—a few years into the space—is the joyous nature of this community of professionals. The pride that everyone at every level takes in their work is remarkable. Their enjoyment of the outdoors, understanding of environmental impacts, interest in the field, and contribution to overall reliability make it a fun sector to be in. I’ve really enjoyed it. It’s been a great place to cut my teeth in. I’ve truly enjoyed it.

Philip Charlton: It’s a great industry. We just have to get the word out.

Leslie Kass: I’m with you, Phil and Tej. Coming in as an outsider, you’re worried. People might react negatively. I mean, I replaced Tom Rogers, who had been with the company for over 47 years. Those are big shoes to fill. But the warmth and support I received, for which I have to credit him and the leadership team here, were incredible. The employees were curious about something new. “Can you teach us something new?” they asked, with an open attitude that happens at every conference and when talking to all of our partners and customers. It is just a super welcoming place.

Tej Singh: Before we conclude today, I wanted to gain your perspective on a trend in the market. Private equity and capital investors are recognizing this as a lucrative space. Companies like Asplundh have accepted outside funding, and Osmose is now private equity-backed, leading to a competitive surge. Well-capitalized companies are emerging as strong competitors. Despite this, you maintain a disciplined approach. This dynamic could pose challenges in keeping pace with the competition. How do you perceive this situation? Does it distract you, or are you focused on your strategic path without succumbing to the pressure to scale rapidly?

Leslie Kass: You’ve certainly hit the nail on the head. We don’t face the same pressures for immediate returns. However, we do have a responsibility to ensure returns on our employees’ retirement dollars. We’re committed to growing their funds so they can enjoy a well-deserved retirement after years of hard work. This commitment allows us to think more long-term. We don’t rush to scale up at the risk of not delivering. We ensure we have the necessary resources and maintain the strong foundation that has been built.

From a resource standpoint, we feel secure. We can acquire any materials we need, and our focus is on building leadership and fostering a sense of ownership. I believe we have a magic ingredient that others lack: employee ownership, which creates a sense of belonging and a family atmosphere that’s difficult to replicate in a private equity scenario. Yet, private equity does have its advantages—it sharpens your focus. Having worked with and competed against private equity firms, I’ve learned valuable lessons about delving into the details of your business, running it efficiently, ensuring investments yield returns, spending wisely, and thinking strategically. They certainly keep us on our toes, but we’re ready to embrace the challenge.

Tej Singh: Before we head out today, we wanted to give you the opportunity to share any new developments or messages you have for the market, the industry, or our listeners regarding Lewis. Our audience is growing and is quite diverse in terms of listenership. It’s a real treat for folks to hear from someone leading such a historic and significant organization. Is there anything you would like to communicate to those in the marketplace about Lewis and your current endeavors?

Leslie Kass: I think what I’ve discovered since being here is that we’re larger than you might expect. We’re like a well-kept secret, always on the move, and an incredible place for work, learning, and development. We’re constantly seeking talented individuals to join our team, and we pride ourselves on being a great partner. We take our utility partnerships very seriously. Having been on the other side, I understand the disappointment caused by an unreliable vendor, which leads to pain and heartache. Our main selling point is not just a good price, but also a product and services from Lewis that you can count on. If there are areas where you’re not receiving the same customer promise, reach out to us; we may be able to help. We’re eager to collaborate with you to explore what’s next, as we believe we can deliver on that promise and are committed to being vigilant guardians of our customer care.

Tej Singh: Oh, that’s awesome. Leslie, we thank you so much for joining us today. You’re leading a great organization, and it sounds like you’re off to a stellar start. We wish you all the success and will be watching closely. We might even see you occasionally in the field to share a beer and catch up. But thanks again for making the time to share a bit about what you’re doing and for spending time with us.

Philip Charlton: Thank you, Leslie. This is good.

Tej Singh: This is awesome. Thank you.

Philip Charlton: I enjoyed it.

Leslie Kass: Thank you. I’m grateful to the industry for the warm welcome and to the Lewis team for their dedication and commitment to safety. It’s essential to not only get the job done but also to ensure everyone comes home safely. I appreciate the chance to talk with both of you.

Philip Charlton: That’s it for this episode of the Trees and Lines podcast, brought to you by Iapetus Infrastructure Services. If you like the show, please give us a rating of five stars on Apple or Spotify. If you have any questions or comments on any of our episodes or ideas for topics or guests in the future, we’d love to hear from you. Please contact us at treesandlines@iapetusllc.com. We’ll chat with you soon.

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