Speaker 1:
From the library of the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, you're Inside the ICE House, our podcast from Intercontinental Exchange on markets, leadership and vision and global business, the dream drivers that have made the NYSE an indispensable institution of global growth for over 225 years. Each week, we feature stories of those who hatch plans, create jobs, and harness the engine of capitalism right here, right now at the NYSE and at ICE Exchanges & Clearing houses around the world. Now welcome Inside the ICE House. Here's your host, Josh King of Intercontinental Exchange.
Josh King :
According to a Gallup poll from last year, 53% of people favor protecting the environment over economic growth, and 42% believed economic growth should be given priority even if the environment has to suffer to some extent. Now, only 4% thought the two should be given equal weight and that suggests that 95% of folks believe that a choice has to be made between the economy and the environment, and perhaps that's the reason why Earth Day 2023, which is going to be celebrated in a couple days after the release of this episode, has the theme of invest in our planet.
The mission will be to spread the message that the two are inextricably linked, just not in the way that most people might think. Despite, what the polls say, the environment is already a major economic driver. Just the market for environmental consulting services will be greater than $160 billion this year. That doesn't count the billions that will be spent to enact the plans that those consultants outline in their reports. Our guests today, Clean Harbors' founder Alan McKim, has taken a more active role in protecting the environment and undoing the decades of damage done by industry before modern regulators took hold.
He joins us to explain how it's possible to protect the environment, clean the planet, and create jobs while building a seven and a half billion dollar company. His company now provides end-to-end hazardous waste management, emergency spill response, industrial cleaning and maintenance and recycling services. Our conversation with Clean Harbors' founder Alan McKim on his career, his company, and the lessons he's learned along the way. All topics captured by his first book Doing the Doing: How a Four Person Startup Grew into a 20,000 Employee Company by Creating a Cleaner Environment. It's all coming up right after this.
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Josh King :
Our guest today, Alan McKim, is the founder, executive chairman and chief technology officer of Clean Harbors. That's NYSE ticker symbol CLH. From Clean Harbors' founding in 1980 until March of 2023, Alan served as the company's chairman of the board and its CEO. He's also the author of his recently published book Doing the Doing: How a Four Person Startup Grew into a 20,000 Employee Company by Creating a Cleaner Environment. Welcome, Alan, inside the SS and welcome back to the New York Stock Exchange.
Alan McKim:
Thank you very much. Great being here.
Josh King :
I remember watching your appearance on Undercover Boss and in the introduction, you show very briefly that image of you on the podium, the sound of the bell ringing. What are your memories of that day?
Alan McKim:
Oh. It was such an honor to be here and participate in the bell ringing and I had my children with me and my executive team and it was just something that I'll never forget.
Josh King :
Have you been back since then, or do you come back for investor conferences or come back to Lower Manhattan frequently on your visits with investors?
Alan McKim:
Sure. We do, and we've had a pleasure coming back here on a number of occasions. I don't think anything was as special as ringing the bell and becoming a New York Stock Exchange company.
Josh King :
So the pages of Doing the Doing simultaneously track the creation of the waste industry and the laws that govern it with your own life and the 40 plus years of Clean Harbors, how did the style of the book come about and what does the title mean? Doing the Doing?
Alan McKim:
So many people had asked me about how I got the company going, what was the driving force behind it, and I was 24 when I incorporated the company, and I thought it was a time, after 43 years of being the CEO... was a time to talk and share my story because I think it really is a story about all the employees and all the great work that our company does. So Doing the Doing is really all about our workforce out there who actually goes out and performs the services that customers need, and many of those are emergency response related like 9/11 here, not too far away from where we're sitting, to be able to help people respond and recover and get back to business.
Josh King :
I want to ask about 9/11, but in the context of Doing the Doing, let's start with maybe what's happening in the newspapers today. We know about the terrible environmental accident in East Palestine, Ohio, but as the CEO or executive chairman of Clean Harbors sitting in your office in Norwell, Massachusetts, you see CNN breaking news and the smoke rising from an accident like that, and you've seen this hundreds, maybe thousands of times over the course of your career. What goes through your mind about, okay, what are these folks going to need to help get back to normal or clean this up?
Alan McKim:
Exactly. We handle thousands and thousands of events every year. Some of them are small. Some of them might just be a simple paint can coming off the back of a FedEx truck, but on a large event like that, certainly we mobilize our emergency response teams and bring in the expertise to help deal with logistics, deal with all of the disposal that's needed. Certainly, we support the frontline team out there. The first responders, they're really the heroes that do the work right at the beginning of those big events, but we're the people that come in afterwards and actually perform the remediation and the transportation and disposal of those kinds of materials so that the community can get back in business and take care of the mess that's left behind, and that's really what we do and I think we do it all over North America really well.
Josh King :
For average folks like us who maybe tune out after that first couple days of breaking news and the smoke rising, what really is involved in the remediation? You can tell our listeners what Clean Harbors has to do in terms of gathering up the toxic materials, encasing them in transportation carriers and bringing them to another place and securing them.
Alan McKim:
Whether it's a hurricane like Katrina or Rita or an event like we are dealing with in Ohio, each one of them is different and as you said, after a couple days, maybe it goes out of the news, but the work is left now to be done, and it often includes coming in and really determining what is the contamination, how do we analyze that and determine where it should best go to be disposed of. If the water is contaminated, where should we handle that? If it's soil or other materials, what are the regulations in dealing with the disposal of those? Can they go into a landfill? Should they need to be incinerated? Are there things that we may be able to do in situ? Can we treat it right on site? Because it might be so significant that it's much better to treat the material on site. So all sorts of different remedies around the remediation is what we bring to the table.
Josh King :
What would surprise an average person about East Palestine? You were mentioning bringing some of the materials to another one of your facilities like, "Oh, that's how it works."
Alan McKim:
That's right, and that's really how it works today for everything that gets created by industry. So much of what we do, whether it's in chemical or pharmaceutical or manufacturing, there is some percentage of residues that gets created and what we do is collect that material, try to recycle it, try to reuse it, find another home for it. For example, our waste oil collection business, we have 600 trucks out collecting waste oil from the Jiffy Lubes and the quick lube changes, bringing that back, re-refining it, making it into a new oil, and then reusing that oil again and again and again, so it's a great recycling story, but I think all the types of waste that gets generated in the country, whether it's from an event like in Ohio or it's from routinely generated, that's really what Clean Harbors does.
Josh King :
Pete and I had the pleasure of welcoming the folks from Darling Ingredients here a couple years ago, and they're very much in the business of taking restaurant oil and restaurant grease and re-refining it and putting that back to use, so the circular recycling of these materials is a key part of Doing the Doing and taking what we think are hazardous toxins and making them reusable in our society.
Alan McKim:
Absolutely. We're exactly like they are and what they're handling from the restaurant business, we're handling it from the automotive business, but it's oil instead of fats and greases. It's a great story, it's a great recycling story and there are many other stories like that. Taking solvents that are used in pharmaceuticals and recycling it and using it in paints and using it in other products, so that is what customers are looking for. They're looking for companies that can come in and offer alternatives to simply destroying materials that they're generating.
Josh King :
So my eight quarts of oil that comes out of my car in the Jiffy Lube and goes down into the receptacle underneath there, eventually, it goes into one of your vehicles. What's its next life use?
Alan McKim:
The next life is to take that oil and re-refine it at one of our plants. We own several re-refineries and about 75% of that oil can be recovered. The rest of it might include lighter ends like fuels or gasolines that got deposited in there, maybe some waste antifreeze, but about 75% of that material that we collect is going to come right back into being a blended oil that you can use again, and we sell that as, really, a green product and we've been really successful selling millions of gallons of that every year.
Josh King :
If you go back to that Tuesday morning on September 11th, 2001, normal day in Manhattan, three blocks from here. I know in some of the videos that I've seen you in, you're conscious of what's there now, the memorial, but at what point did Safe Harbors get involved in the remediation of that site and what's your reflection on that?
Alan McKim:
I was here probably three or four days after the event and we set up areas where the firemen could go into a decontamination process, so as the recovery was ending and really the whole emergency was going to turn into a big remediation project, we decontaminated the firemen, so when they left at night, they weren't bringing that stuff home with them. We also did that with every piece of equipment that left the site, so as debris started leaving here, we would have to make sure that the trucks were washed down, that any of that residue was collected and managed, and so we had about 350 people here really around the clock for the first seven, eight months basically remediating and taking care of those kinds of things.
Josh King :
Taking care of those kinds of things is something that Alan McKim has been doing for 40 years and perhaps an alternative title of your book instead of Doing the Doing could be The Bell is Ringing. How does that phrase capture the disruptions that built Clean Harbors from, as you say in the book, this $350 startup to this $5 billion provider of environmental and industrial services?
Alan McKim:
It's really in our culture. We're a response-orientated company, and so our whole business is built around answering the call. When the bell rings, we're going to run out the door. Oftentimes, we don't have a contract with the customer. It might simply be that, "Hey, that tanker truck flipped over and they need a response." We can get there, we can help. Maybe we'll get the job, maybe we won't, but a big part of what we do is looking at opportunities like that that happen every day and responding, and oftentimes, because we do a great job in that initial response, we're often given the jobs for those big events.
Josh King :
In 2008, you and Clean Harbors temporarily put a new definition to the bell is ringing by ringing our own bell here at the NYSE for the opening bell. You were joined on the podium that day by your kids. As you mentioned earlier in our conversation, each of them worked for Clean Harbors for at least a short period of their lives. Was that your way of recreating the garage environment with your grandfather and father helping you work on neighborhood cars at the very beginning of your story?
Alan McKim:
Yeah. When you think about the amount of time that was put in, particularly in the early days of starting the company and building the company and having four children being part of that, and so it was really ringing the bell for them as much as it was for me and our management team. A real celebration to ultimately get to the New York Stock Exchange and to be traded on the exchange is really something that I'll never forget.
Josh King :
You write about growing up in Quincy among the McKim clan and other blue collar families. How did the experience shape you as a person and where did your drive to always make a buck come from? You talked in Undercover Boss about you were the kid doing the paper routes when other kids were maybe playing ball at the yard.
Alan McKim:
I think it was just in my genes or maybe just how I ended up growing up and realizing that I loved working with my hands. I had a real strong aptitude towards mechanics and maintenance and cars and stuff like that, and so that all grew as I was a young man, and-
Josh King :
Was that a love your grandfather or father gave you or did you get that yourself?
Alan McKim:
No, my grandfather. I certainly would visit him every Sunday and we would tinker around in his garage and it was something that I really loved doing and I've carried that through to today. I still love tinkering in the garage and still building cars.
Josh King :
In 1980, you launched Clean Harbors in the garage. What was the genesis of the company back then?
Alan McKim:
When I incorporated in March of '80, it really was with the idea of going out and performing the kind of emergency response work that we do even today, as well as the regular maintenance, like cleaning tanks, working for the utilities, handling manhole explosions and transformer work that needed to get done, but a lot of the maintenance work for the major oil companies and power utility companies was what I originally focused on when I started the company.
Josh King :
Where did the idea come from? Was that your time with JetLine or where did McKim think people can pay us for this stuff?
Alan McKim:
Yeah, I think my first six years at JetLine, I had come to learn a lot about how to recycle oil and how to handle oil spills and how to respond and what to do when the bell rang, and so those are my early years of really understanding and getting this in my blood, which I love the business and I love being able to do what we do. I think the men and women of Clean Harbors are so special in what they do every day and I just loved working with them and supporting them in what they do out there.
Josh King :
I saw the video of the trailer that was set up behind the garage that was the first headquarters of Clean Harbors. What was it like with you and your pals starting a business?
Alan McKim:
Oh, it was just awesome. You wore a lot of hats, so you went out and you drove the truck and then you performed the work and you did the billing, and then you collected the money and sometimes you didn't get paid, sometimes you didn't have a paycheck. Those first few years of having the company begin and grow, growing from $600,000 in revenue the first year to 1,000,00 in two and then 2.4. We were growing leaps and bounds, but nothing in my wildest dreams that I think we would be here sitting talking to you about a $5 billion revenue company.
Josh King :
I'm shoveling driveways in Newton, you're cleaning oil spills on Cape Cod. At a time when contracts were given out on a first come first serve basis, your, at that point, fledgling company caught a big break of sorts in 1984. Let's listen to the iconic WBZ anchor Liz Walker and her reporter on the scene, Shelby Scott.
Liz Walker:
We should know on Monday how that freighter grounded on Cape Cod will be salvaged, but as eyewitness news reporter Shelby Scott tells us, as long as the ship sits there, people want to see her.
Speaker 2:
It's a chance of a lifetime to see something like that.
Shelby Scott:
The people just keep coming to see it. The Maltese Freighter Eldia blown up on Nauset Beach during that March 29th storm. The walk to get close to the ship is not easy. It's a mile in soft sand, but most who make the trek say it's worth it.
Speaker 3:
It's quite a sight to see, seeing something like that washed up. Must be an awful powerful ocean.
Josh King :
Alan, that mile across soft sand on Nauset Beach was a logistical issue for your fledging company, but you had your name emblazoned on your trucks for those thousands of visitors. It was really quite the boon for you getting that gig.
Alan McKim:
It really was. We went out and we bought all the hose that we could find to be able to basically collect the oil off that freighter. It had about 400,000 gallons of black oil on it that ran the engines on that boat, and so we were there for 30 days pumping night and day, and we had a lot of great publicity as all the community would show up, thousands of people, as Shelby said, but also the helicopters flying overhead, and so we had a big Clean Harbors billboard and that was really a major turning point for our small company back then.
Josh King :
In terms of getting the assignment, how does Clean Harbors get the contract?
Alan McKim:
Well, again, a risk. We show up, we have the gear, the Coast Guard sees that we have the ability to basically execute right away where maybe other companies might not have those resources, and so they gave us the contract. Ultimately, the insurance company and the ship owner is responsible, but you really need to have that federal agency to step up just in case they don't end up paying the bill.
Josh King :
If we go back to that timing, how did the company's timing coincide with, in the broader world, the rising interest and more importantly laws that would be enforcing both environmental cleanup and industrial waste disposal? You had this miraculous timing of Washington DC saying, "We're going to have a lot more stringent controls on this stuff."
Alan McKim:
Yeah, when you think about Congress in '76 creating RCRA, the Resource Conservation Recovery Act, and then that actually becoming implemented in 1980, we started our company right at the cusp of new regulations that were going to change the way that industry dealt with the environment, and then there were subsequent changes in laws throughout the eighties and the most significant change was OPA 90 after the Valdez spill in Alaska. Then Congress created OPA 90, which really set about a whole different set of regulations on how anyone who was handling oil at shoreside facilities was going to have to be prepared for any kind of oil spill, and so through the eighties and nineties, the company really enjoyed tremendous growth meeting the needs of what our customers had to face dealing with these new regulations that were being put in place.
Josh King :
Were you in a position to work on the Valdez spill?
Alan McKim:
We were. I was actually there, but it was mainly just to provide equipment. It was so far away and much more of a labor-intensive job just cleaning up the beaches. As we all know, much of that was not contained.
Josh King :
The early success that you had let you start some of the many acquisitions you've had in the 65, I think, that you've recorded while you've been chief executive officer of the company. As you write it in the 1980s, your company became good at picking up some of the pieces left by barbarians of the gate. What about the types of facilities and companies you needed made them so unattractive to the conglomerates but really perfect bolt-ons to your business?
Alan McKim:
Sure. Back in the eighties, a lot of the large hazardous waste companies were owned by solid waste companies, and so their real focus was much more on the end disposal, the landfills and the incinerators. These permanent facilities that were available oftentimes were critical recycling plants, so they had permits, they had infrastructure capabilities, and that was what we needed to be able to grow and service our customers' hazardous waste needs. We were very fortunate as some of these larger companies consolidated and they spun off some of these smaller assets that they didn't need. Those really became strategic for our building out our network.
Josh King :
Over the 40 years that you cover in the book, Alan, I guess you could say that the environmental services industry has gone through these series of booms and busts. What drives these cycles and what are the types of indicators that you use to decide where you think the industry's headed next?
Alan McKim:
Because the industry was growing so significantly because of these new regulations, it brought in a lot of new players, particularly the railroads. Railroads thought that there was going to be this enormous market getting developed for cleaning up Superfund sites, which were certainly sites going back to the twenties and thirties, but it took them a little longer for them to all get into the business and many of them get in in a big way, invested a lot of money, and it became an over capacity situation, and so by the middle of the nineties, there was so much capacity and pricing was going through the floor instead of increasing, that a lot of those companies decided to exit just as fast as they got into it.
During all of that turmoil, I would say that was the greatest challenge that our company faced in being able to survive the shakeout that took place, and it culminated really in 2000, when Safety-Kleen ultimately went bankrupt, the old Laidlaw Corporation, and at that point, it provided a huge opportunity for Clean Harbors to basically acquire the old Laidlaw business. For the last 20 years, our company has grown from $300 million in revenue to $5 billion off of that really transformational event that took place back then.
Josh King :
As you made these acquisitions early in the company's history, you wanted one culture. How did those experiences serve as a roadmap for the far larger acquisitions?
Alan McKim:
I think we created a playbook, and certainly, that playbook has morphed over the years, but I think the foundational thing that we've put in place was really making sure that there's a good cultural fit and cultural fit really means responsiveness. How do we make sure that these companies that we're bringing on are going to provide the customers with that same level of response that they're expecting from us? I think the second thing is leveraging our technology, and so having one platform that all the companies will be operating from was key to our early days, building out our first win platform back in 1985 when technology was really in its infancy. If you think about networks and PCs and cell phones, none of that even existed when I started the company, so building a platform that every company that we acquired we could leverage and put them on our platform was another critical aspect of what we did.
Josh King :
Going back to the time when you were just getting ready to go public in 1987, you made the decision to do the IPO despite this market correction that occurred as you were doing the roadshow. What made you decide to push forward and what advice do you have for founders in similar situations of market uncertainty, certainly that we are facing this year? You're walking out into this really stormy weather and you go forward anyway.
Alan McKim:
Well, I think up until 1987, we had not brought really any equity in, so it was my original $15,000 investment from borrowing money on my home that started Clean Harbors and gave it the working capital. We were really leveraged and we've maxed out our lending capabilities with our favorite bank. Even though the crash of '87 had happened and valuation of our stock went in half before we even went on the road, it still made sense for us to sell a small amount of shares and become public, access to capital markets. I certainly think today is a totally different world with the private equity firms that exist out there, how there's so much other alternative funding mechanisms, but it really gave us a currency to use to grow our business and acquire other companies, and we've done that on a number of occasions by doing stock for stock transactions.
Josh King :
In your book, Doing the Doing, you write, and I'm going to quote you here, "A major part of being a CEO is hiring the best people possible to address the company's needs at the time." How did you learn this lesson, Alan, by hiring a COO who didn't work out and then a co-CEO who did work out?
Alan McKim:
Yeah, it's great learning experience for me as growing up and learning how to run a business and as we hit the wall at $100 million in revenue, I realized that the people that I had inside the company at that time were not experienced to manage that side of the business, and so bringing people in from outside was critical for us and critical for me. Sometimes there's a good fit. Sometimes there isn't. I think what I've always felt that I've been really good at is bringing in really good people much smarter than me to collaborate with and to really, together, make the right decisions on how to grow the business and how to continue to be successful. As the company continued to grow from a billion dollars in revenue to two and then three billion dollars, you can imagine how those skills need to continually change. I think that's been a real strength of our company, is the ability to continue to grow our management team to meet the needs of the size and issues that the business is facing.
Josh King :
In a similar vein about some of the lessons you've learned along this 40 year journey, Alan, you saw the need to cut your losses trying to get an incinerator plant running in Braintree, Massachusetts and instead headed west. How did your investment of a dollar in Nebraska turn out for the company and the town of Kimball?
Alan McKim:
It was a wonderful opportunity with Kimball, Nebraska. So a major oil company had built an $80 million plant to handle the waste catalyst coming out of their refineries and regulations actually had changed in favor of them to be able to use that within their own cokers, so now all of a sudden, this plant was available, the community was very receptive of the plant. They wanted to save the 100 plus jobs that were there. We have built a great business in Kimball. We're building another plant right now, $180 million plant, larger than the one we have, so we'll have two facilities at this particular location, and I think that contrasts with, really, the difficulties of building greenfield sites. Going into a community and trying to get a permit and build a new plant has never been done in the last 30 years, so it's only those companies that have had a permit, that have the community relationships that have been able to actually not only keep them running, but also grow their business.
Josh King :
You go into detail in the book, but the years following that Kimball incinerator acquisition were really the lowest of your professional and personal life. What were the lessons that you took from that period that allowed you to continue your success in the years that would follow that?
Alan McKim:
There was a lot of difficulties in our business and personally going on at that time. The mid-nineties, '96, '97 timeframe were really the most darkest times for Clean Harbors, and we were close to the faults. I was borrowing money to make payroll even as a public company, but quite frankly, I think that experience that we went through of being able to change how we run our business and take costs out of our business and really how to look at continuous improvement has been at the foundation now of our business since that period of time, and I think it's really made us successful going through those challenges.
Josh King :
As we head into our mid-show break, Alan, your book, while mostly chronological, begins telling the story of the 2020 cyber attack on the company and ends with the 1997 fire at one of your facilities. Why do you choose to start and end with these low points to tell both the ups and downs of the Clean Harbors story?
Alan McKim:
Going through the cyber event was just such an example of how the men and women of Clean Harbors answer the call when the bell rings and how we were able to work our way through a very, very difficult situation. The same holds true when '97, our largest facility, our largest service center at Christmas Eve burnt down, when we all showed up there and bootstrapped up together the next day, was able to continue to service our customers without missing a beat. I think those kinds of stories speak to the people that do the doing at Clean Harbors every day.
Josh King :
How did the call come into you on Christmas Eve and what did you do?
Alan McKim:
My wife and I got in the car and met with the general manager and his wife, and we were there while the fire was still being put out over in South Boston, and it was one of the many events we talked about. For example, Valdez, Alaska, that was at Easter. It always seems like these events happen on Thanksgiving, Easter, Christmas, whatever, holiday, and so it was just another example of us going out no matter when to respond to an event.
Josh King :
After the break, Alan McKim, the founder of Clean Harbors, and I are going to talk about the business decisions that defined his career and other lessons from his book Doing the Doing. That's all coming up right after this.
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Josh King :
Welcome back. Before the break, I was talking to Alan McKim, the founder, executive chairman and chief technology officer of Clean Harbors, that's NYSE ticker symbol CLH, about his career and the defining moments that he's captured in his book Doing the Doing: How a Four Person Startup Grew into a 20,000 Employee Company by Creating a Cleaner Environment. So Alan, before the break, we were discussing some of the lows and trials you went through during the 1990s. At one point, Laidlaw, we mentioned earlier, your rival company, tried to corner your debt by buying up bonds. By this point, you've been running the company for years and inexplicably found time to get your graduate degree. Would the attempt have been successful earlier in your career to go back to school?
Alan McKim:
I don't think so. I think the timing was right for me. I had just turned 30 and I had four children at the time. The company was on its feet at that point. We had just gone public. I was actually going public the same time I was going to school. I think the timing was perfect for me to go back to school and realize that I needed more tools in my toolbox.
Josh King :
Talking about the tools in your toolbox, eventually, Laidlaw, by that point, been renamed Safety-Kleen, got over its skis and offered you an opportunity if you were willing to bet the company. How did the minnow manage to swallow the whale?
Alan McKim:
I think ultimately, Laidlaw ended up merging with a company called Rollins, which was also a New York Stock Exchange company back in the late nineties, and then did a hostile takeover of Safety-Kleen after that, which was also a public company, a New York Stock Exchange company, and about 18 months after that hostile takeover, the business was put in bankruptcy and then they subsequently split the business back in half, and so we were basically able, through the bankruptcy process, to acquire the old Laidlaw Rollins assets, and those were some wonderful assets. There was quite a few environmental liabilities that went along with them, but that's the business we're in. It was perfect sense for us to take the risk of taking on those assets, knowing that we could clean them up over a period of time, but also put those assets to work.
Josh King :
When you did the complete acquisition of both parts of Safety-Kleen, really took a decade and left Clean Harbors, perhaps ironically, as the industry giant that was being pressured to divest some of its assets. Can you talk about the role of both investor relations and also your board of directors helping guide you and Clean Harbor through all of the divestments and investments needed to create the company that is today?
Alan McKim:
I think the board has been so critical for us as we've continued to grow our business and as you would expect, our board has changed as well. Early on, some of our board members were maybe more focused on finance or maybe more focused on human resources. As the company grew and the needs of the board changed, we would certainly have the board change with that as well, and so we've been fortunate to have a real great board that has helped us particularly through all the acquisitions and the expansion that we've... taken place. I think keeping the board closely informed with all of the things, being real transparent with the board, I think it's been critical for our success because it's allowed them to openly give back their advice on what we should be doing along the way and guiding us through their experiences, our company, successfully. I think it's been terrific.
Josh King :
The cover of your book Doing the Doing features you in full safety gear, not your typical blazer and shirt I'm talking to you in today, but 40 years after the founding of the company, you put the gear back on from a respirator to rattlesnake guards along with a wig to participate in this show that a lot of us have seen, Undercover Boss. I watched it earlier today. Here's a clip of you helping on a Clean Harbors' job in Arkansas.
Undercover Boss Audio:
I want to brief you a little bit about the animals because we have the rattlesnakes we have to watch out for, especially near the water lines, as well as alligators.
Alan McKim:
I really don't like snakes. Help me understand about the snake part.
Undercover Boss Audio:
Scan the ground area around us before you step out into the tall grass, obviously.
Alan McKim:
Oh man. I hate snakes. I don't know what it is, but I really don't like snakes.
Undercover Boss Audio:
I don't know if Bill's going to be cut out for the job today.
Alan McKim:
I would be paralyzed if a snake came across me.
Undercover Boss Audio:
It looks like an entire house.
Alan McKim:
Wow.
Undercover Boss Audio:
Let's suit up. We're in a rattlesnake area, so we're going to use these to protect our feet in our boot area.
Alan McKim:
Okay.
Undercover Boss Audio:
Be careful. Don't slip.
Alan McKim:
Okay.
Undercover Boss Audio:
Any kind of household waste, we'll start picking up.
Josh King :
Alan, generally, as I watch the show, a lot of your colleagues in different parts of the country looked at this character that they were presented with and scratched their head and wondered really if they were Clean Harbors' material. You probably pretty much proved them right when it came to rolling up your sleeves at that point in your life, but besides the fear of snakes, what did the experience teach you about the company and these people who worked for you?
Alan McKim:
Well, going out and doing the Undercover Boss was a great experience for me and gave me an opportunity to meet and work was some amazing employees and really, they didn't know me and I didn't choose them. The company that was filming decided where to go, what kind of jobs that we were going to be doing together, but it really gave me a great perspective on how employees feel about management, how they feel about their jobs, what they like, what they didn't like, and I was able to bring back a lot of their feedback and talk with our executive team and hopefully make the company a better company because of that feedback.
Josh King :
I watched the clip with Brianna who you wrote about in your book. Can you talk about the employee resource groups that Clean Harbors started for employees that are like her?
Alan McKim:
We, I think, have really tried to expand our diversity and be more inclusive as a company, be more equitable. These are employee-led groups. We have seven employee-led ERGs. They have probably now been in place for about three years, and they're really just in the beginning phases, as I would say, trying to get more employees feel more welcome in the company, no matter how they think, how they feel, what they look like. I think it's been a real focus of mine and a focus of the management team, and I think overall, it's been a real success for us.
Josh King :
With 20,000 employees now, it's got to be difficult for everyone to feel that management is approachable and throughout my career, I've worked with CEOs and tried to bridge between them and thousands of people who work for them. Did your executive team see an uptick in employees reaching out after your appearance, a sense that Alan McKim is a guy that they could send an email to, talk to?
Alan McKim:
A significant increase and maybe to a detriment to my inbox. I had so many people that would reach out to me across the company because they really knew that I was approachable. They saw me in the show. Prior to that, certainly many people in the company knew me by first name. We've made a point to go out and travel and visit with so many of the sites, but now having 750 locations, it was really impossible for me to get out and the management team to get out and visit every site, but the number of emails that I would get and phone calls I would get after Undercover Boss was amazing, to say, "Could you help us here? We saw what you did there. Are you aware of these kinds of issues?" So our whole area of human capital management is something that we've really expanded on, realizing that we could do a much better job of communicating as well as listening to our employees.
Josh King :
A lot of the jobs that you did on the episode were activities you did early on with the company in the founding years that you and I talked about earlier. The need to physically climb into oil tanks to clean them hasn't changed, Alan, but what role did technology have in the growth of the company?
Alan McKim:
Technology continues to evolve in how to make work safer. The work that we do in the field for our customers is very difficult work, often in a very difficult environment, whether it's inside a tank or it's because of an event that took place like an emergency spill from a hurricane or a release or something like that. So technology is going to be driving improvements for the safety of our employees, like using hands-free technology, robotics, drones, things that can help our workers keep their hands out of harm's way, so to speak.
Josh King :
Considering some of the high profile incidents that we've talked about, it was surprising to read that perhaps the biggest job that Clean Harbors ever took on was the culling of the flock in the height of the 2015 avian flu crisis. How did that experience prepare Clean Harbors to react both internally and with clients to the 2020 COVID pandemic?
Alan McKim:
I think it's a great example of us being able to work with the federal government, work with the different agencies to determine what their needs are, how do they want to handle this kind of an event? What's the proper way to deal with this type of contamination? We learned early on during the anthrax work back during 9/11 how to handle those very sensitive spores, those kinds of materials. The largest job really was that culling of those birds, the chickens and the turkeys. 50,000 chickens, 5 million... Excuse me, 50 million chickens, 5 million turkeys had to be destroyed, and so we have mobile incinerators.
Josh King :
Was this an expertise that you had going in, or did you create it at the time?
Alan McKim:
Well, we had done a lot of training and had done preparedness work with some of the government agencies, but it was really the first time where they actually executed it and pulled the trigger and had us go out and do it. Same thing with COVID. First and foremost, making sure that our frontline workers that couldn't stay home, had to show up every day, how do we make sure that they're safe? What is the right PPE? How do we handle decontamination? How do we make sure we keep them safe? Subsequently, how do we help our customers because a lot of their employees had to show up every day as well. I think our ability to change and adapt to these new events are something that we're really good at and I'm sure is going to be something that we're going to have to deal with in the future.
Josh King :
Just this week, there's been a flurry of articles about the future of work and office space as billions of leases are due to come to term. You've written about your experiences and concerns even before the pandemic for the future of the traditional workplace and office camaraderie. How's Clean Harbors looking to create the type of culture that you worry might be being faced out?
Alan McKim:
We're very much a collaborative organization, whether it's at headquarters or in the field or at a regional office. We do our best work when we're working together. When we're collaborating face-to-face, we realize there may be some jobs that can be done remotely, and so we're trying to be flexible again to deal with some of those roles, but for the most part, we're out doing the doing every day at our customer sites and our people need to be right there with them supporting them, whether it's administratively or providing their supplies for inventory management. Our people need to be in the office, and so I think we've been really good and successful, I should say, about getting people back.
Josh King :
Talk a little bit about the footprint you have in the New York metropolitan area. How many offices, what kind of employees, what are their day-to-day jobs, how much are they seeing one another, how often do they get an emergency call, things like that.
Alan McKim:
Sure. So they're getting calls day in and day out here in New York. In the city here, all the power is underground, so you hear about manhole explosions, you hear about transformers blowing up or power going out. We're working hand in hand with the agencies with the utilities to get the power back on again. That's using our vacuum equipment, doing our response work to get the sites cleaned up so that the utilities can come in and turn the power back on, so to speak, or it might be working in the port, dealing with the ships that are coming in and handling their bilge water, disposing of that material, but all of the industry in Long Island here, Staten Island, all of the industry here, our people are showing up every day, whether it's handling medical waste from the medical facilities here or it's handling pharmaceutical waste from the pharmaceutical companies in North Jersey. That's what we're doing every day here.
Josh King :
I read a lot of your corporate accolades that are on your website. Among them, some of the best places to work for veterans, et cetera. You've got to employ a lot of people. You've got to find a lot of new people to fill vacancies. What's the labor market like for you, and where do you find, and how best do you train your new members of your team?
Alan McKim:
So we put a big effort in recruiting, in trying to expand our network and putting in a referral program that has been very successful, really trying to focus on veterans. We have hundreds and hundreds, thousands of veterans now working with us, and they have the training and the skills that really work so well in our company, and so that's been a real target area for us to grow. We could continue to add thousands of people every year. Our constraint in growing our revenue is labor constrained, whether it's hiring drivers or putting people out in the field as chemists. That continues to be a big challenge for us as it is for many of our competitors.
Josh King :
One topic that's high on the list for employees and investors alike is ESG. Really is a term that didn't exist earlier in your career. How does ESG define everything that you set out to do with Clean Harbors really back in 1980?
Alan McKim:
Well, certainly in our early first jobs that we did was about cleaning out oil tanks or cleaning up an oil spill and then taking that oil and recycling it and selling it as a fuel, and so I think we've been doing this for a long time. When you have household hazardous waste and you bring it into your collection center or your in-town transfer station, we're there. We're taking that paint, we're taking that oil and we're recycling that. That's really what we're all about, is how do we help recycle and reuse more and more materials that are being discarded across the country. We have a great story. I think our second annual ESG report was posted, and we've made some great strides in improving our carbon footprint for sure.
Josh King :
You have a great story. You've seen so many things come and go, Alan. America has a challenge with reusing its waste. Where can America as a whole do better than we're doing?
Alan McKim:
I think probably more incentives would be helpful to drive more things out of the landfills and into the areas of recycling. Certainly in batteries I think is going to be a big one here. We've been looking at that market, but really, lithium is very dangerous material to handle, and many companies who are managing recycling of batteries are having difficulty around that space. More government incentives I think would be help to get more stuff out of the landfills.
Josh King :
As we wrap up, in the book, you talk about the difficulty you had early in Clean Harbors' history to sell even a small part of the company. Now, we talked before we started recording this episode about how you've stepped back a bit. Will there be a day when you devote yourself full-time to fishing or using some of the golf balls that you've collected outside of headquarters?
Alan McKim:
Well, I don't see that happening right away. I love the work that I do in working with the team, and as I've now stepped down as CEO and really trying to focus more on strategy, acquisitions and continue to focus on the technology side of things, I want to continue to help in that area, but we've got a great management team in place. The team that is Eric and Mike, who are CEOs now, have been with the company a long time and have been part of our success, so I'm so excited for them to take the business to that next level to 7 or 8 billion dollars here I think is with in sights for us.
Josh King :
Alan, the book's postscript is your 10 lessons on business and three of them revolve around capital, four around people and only one on technology. Why did you decide that chief technology officer would be the best place for you to continue to guide the company?
Alan McKim:
I think for the past 35 years, I've been driving software and technology as a way of supporting the growth of the business. I learned a long time ago that having a single platform to build from was going to be critical, and I wanted to personally be involved in that, so the CIO always reported to me over these years. We're in the middle now of converting a lot of our software to the cloud. We're looking at developing more connections with our customers digitally and using a lot more AI and robotic process automation, those kinds of things. I've been so involved with that that I really felt like I could at least continue in that area to help the company grow.
Josh King :
The pages of the book contain more information on everything we've been talking about, as well as about dozens of people topics and events that we really didn't get a chance to touch on, and with this, we've come to our end of our journey here talking about the origins of Clean Harbors and your story, Alan, but are there any final thoughts you'd want to leave our listeners with?
Alan McKim:
Well, I think they're unsung heroes is really who our employees are. I really wanted to really showcase them in the book. There's so many that I would've liked to have named in the book, but there were only so many names I could put in there, but I'm so proud of the work that our people do at our company, how they've made the environment better for all of us and continue to do that, and I think the safety, the compliance, the training I think has all been part of how this company has become successful as it has, and I'm really proud of what they do.
Josh King :
We are really proud to have you as one of the listed companies in the New York Stock Exchange, and great to have you back, Alan. Thanks so much for joining us-
Alan McKim:
Thank you so much.
Josh King :
Inside the ICE House.
Alan McKim:
Thank you very much.
Josh King :
That's our conversation for this week. Our guest was Alan McKim, founder, executive chairman and CTO of Clean Harbors. That's NYSE ticker symbol CLH. His book Doing the Doing: How a Four Person Startup Grew into a 20,000 Employee Company by Creating a Cleaner Environment. It's now available on Amazon or wherever you get your books. If you like what we heard, at least rate us on iTunes so other folks know where to find us, and if you've got a comment or a question you'd like one of our experts to tackle on a future show, email us at [email protected] or tweet at us @ICEHousePodcast. Our show is produced by Pete Asch with production assistance and editing from Ian Wolf. I'm Josh King, your host, signing off from the library of the New York Stock Exchange. Thanks for listening. Talk to you next week.
Speaker 1:
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