Lee Anderson’s philosophy boils down to one simple, homespun phrase: “I’d rather hire a fast nickel over a slow dime.”
He values enthusiasm, energy and loyalty above any other attributes in his employees. He wants to work with people who aren’t afraid to take chances, embrace his vision and share his passion about the benefits of hard work.
“Our culture is built around individuals who have a strong sense of loyalty and a commitment to team play, and who believe that what’s good for the company is good for the individual,” he said. “I like young, aggressive individuals. They might not always make the right turn, but they’re always turning.>
“ ‘A fast nickel’ makes a lot of sense to me. I’ve always thought of myself that way, too.”
Anderson has parlayed this philosophy into one of the 500 largest privately held companies in the United States. APi Group, a Roseville-based holding corporation of 23 construction, manufacturing and fire protection companies, has annual revenues of $750 million and an average annual return on equity of more than 20 percent over the past 15 years. APi has 6,000 permanent employees – and, he’ll tell you with a grin, “a lot of them are fast nickels.”
The fastest nickel in the roll is the silver-haired Anderson, the son of a plumbing contractor and a three-sport star at Breck School. The six-foot-seven-inch Anderson wanted to enroll at Harvard, Dartmouth or USC and play football, but his father had other ideas.
“Dad was convinced I should go to West Point,” Anderson said. “He talked me into taking the entrance exam, and I passed it and interviewed with Red Blaik (the legendary Army coach). I was impressed but intimidated by the program at West Point. Dad said, ‘Surely, this is what you want to do,’ and I really wasn’t sure! But I agreed to go, and I had a wonderful experience.”
He played football and basketball, starting as a forward his last two years and earning All-East honors as a senior by scoring 14 points a game. He graduated in 1961 with a degree in civil engineering and was assigned to Luke Air Force Base in Phoenix, where he was responsible for materials procurement and construction services. He was promoted to captain and envisioned a career in the service, but then his dad had a heart attack in 1964.
“Dad needed me back here,” Anderson said. “I had been brought up to understand that one of my goals in life was to work in the family business. He told me, ‘I can help you in business if you’re here but I can’t if you’re not,’ so I came home. It was the right thing to do.”
Anderson started in sales at Asbestos Products, a St. Paul company that sold insulating material to the building trades and had 13 employees and a net worth of $60,000. He moved up there and began to acquire businesses, the first an industrial sprinkler company in 1968. The acquisitions continued over the next 30 years as APi purchased companies such as LeJeune Steel, the largest structural steel fabricator in Minnesota, and Western States Fire Protection.
“I always felt I had good foresight on which direction to move the company,” he said. “Life safety is an important aspect of what we believe in America – to create a safe working environment. We chose markets where there was a strong and continuing demand for things such as fire protection, security systems and alarm and detection services.”
Once he acquired a company, Anderson didn’t dictate how it should be run. “We wanted to keep the old owners involved,” he said. “Most entrepreneurs have strong egos and pride in their companies, so we try to stay out of their way as much as possible. They don’t see us or hear from us that much, and we don’t send them corporate-wide memos and directives.”
APi projects span a wide spectrum, ranging from steel fabrication and fire protection at the Mall of America to mechanical maintenance during shutdowns at pulp and paper companies to fire protection services at three nuclear power reactors under construction today in Canada. Anderson expects APi to become more involved in energy resource markets because of the need to generate more electricity in states such as California.
“We use the word ‘synergy’ in our group a lot,” he said. “It’s best if we can engage two or more of our companies in one project, and often four or five. That can include steel fabrication, mechanical and electrical systems, insulation and even the furnishing of garage doors.”
Anderson’s interests became diversified in 1978 when he purchased a bank in International Falls. He bought 18 more banks over the next two decades before selling them, at the suggestion of his son, to Norwest (now Wells Fargo) in 1997. The deal made financial sense, although he found it difficult to do because “I’ve never been a good seller, having spent all my life buying.”
“That’s true; dad’s not a seller,” said his son, Andy, who ran the banks at the time and came out of the sale with Northern National Bank, which has offices in Nisswa, Cass Lake and Baxter. “At the time, the price you could get for banks was sky high. I felt we were at the point, size-wise, where we didn’t have to sell, but it was a logical thing to look at.”
The decision to sell impressed the younger Anderson because it demonstrated his father’s strengths even though he isn’t a seller by nature. “He has this remarkable ability to assess a situation – fiscally, mentally and emotionally – and make the correct decision quickly on whether it’s a good deal or a bad deal. He hires people and trusts them to run the show. He has his rules, of course, but he’s able to develop a quality group of people and let them do their thing.”
J. (Rob) Link has seen those same qualities in his 28 years at APi and A & L Properties, a Duluth-based real estate development firm that he owns with Anderson.
“Lee can be firm, too,” Link said. “You don’t get to be that successful by not setting high standards. Lee not only demands high standards, he maintains them. I haven’t seen any wavering in the nearly 30 years I’ve worked with him.”
Anderson credits his father for instilling those standards, an unflagging work ethic and self-confidence when it’s time to make a difficult decision or try something new.
“Good things can happen, but you have to have faith in your ability to take a chance,” he said. “A lot of people say, ‘Hey, I thought of doing that,’ but they didn’t act. I do, or at least I try.”
He’s the first to admit that a certain bit of “luck” always is at play, too, but even luck has its genesis. “There are two kinds of luck,” he said. “One is winning the lottery. The other is the environment you place yourself in that creates opportunities to be lucky.”
Luck and, of course, the ability to always make the most of a lot of fast nickels.
Lee Anderson and St. ThomasJoined the Board of Trustees in 2000 and serves on its Audit/Finance and Investment committees. He also is a member of the School of Law Board of Governors and serves on its Advancement Committee.Received the John F. Cade Award for entreprenurial excellence from the John M. Morrison Center for Entrepreneurship at St. Thomas in April 2002.Has traveled to Cuba with St. Thomas delegations, including those that delivered medical supplied to hospitals and the 2000 baseball trip. He opposes the U.S. embargo, favors "anything we can do to break down barriers" and with his wife, Penny, established an endowment to provide scholarships for St. Thomas students form Cuba and other Carribean nations.Applaudes St. Thomas’ willingness to establish new ventures such as the School of Law. "St. Thomas has real momentum, and everybody wants to be a part of a winning team." The biggest challenge in the future, he adds, "is to keep the momentum going."
Harry Truman and the White House "plumber"Lee Anderson loves to tell how his father, Reuben, came to be known as "the White House plumber."Anderson had contacts in the federal government because of construction work he did during World War II. When the White House needed new plumbing in 1950, Anderson submitted the winning bid. He occassionally bumped into Harry Truman, and once gave the president a poem that he had written, "The Low Green Tent," about one’s final resting place. Truman mentioned the poem in his autobiography."Dad also gave out little wrenches with the inscription, ‘Reuben Anderson, White House Plumber,’" his son said. "He was proud of his work, and he wanted people to know it."