Scott Barbour had large shoes to fill when he was named president and CEO of Advanced Drainage Systems Inc. in September 2017. Fortunately, he was up to the task, with 27 years of experience working for Emerson Electric to fall back on, including helping sell the Network Power business.
That experience is part of the reason the board hired Barbour to replace the retiring Joe Chlapaty, who spent 37 years with ADS, including 13 as CEO.
“I’ve had some experience on how to transition from one person to the next,” Barbour says.
The biggest key is visibility, which is part of Barbour’s nature anyway. He visited about 15 of ADS’ 48 facilities in the first nine months, focusing on key locations such as California, Texas and Florida.
The company, which manufactures corrugated pipe and other products for water management, has about 4,400 employees and $1.3 billion in annual revenue. It also is one of the 10 largest recyclers in North America — about 60 percent of its raw plastic is recycled.
“If a new guy takes over and he just sits in his office and only talks to his CFO and the HR VP, that’s not visibility,” Barbour says. “So I did, quite frankly, work very hard to be visible and communicate about me, what I was learning about the company and ask questions.”
Chlapaty and Barbour also worked together to ensure a smooth transition.
“I have lunch with him every month. I call him when I’ve got a question about something. He’s engaged in the conversations and the board meetings in a highly constructive way. So, I give a lot of credit to Joe to making this a good transition,” Barbour says.
Build onto the foundation
Barbour arrived in the middle of a fiscal year. Therefore, his first goal was to help the team hit that year’s plan. He emphasized fundamentals and execution, which he says make all the difference.
Then, he helped develop a budget for the next year and put together a three-year strategic plan, which was communicated to the board and stakeholders in 2018.
The three-year plan focused on growth, expanding margins and generating cash. With a strong performance, ADS has also aggressively paid down debt — even though it’s not an overly leveraged company.
While ADS went public in 2014, Barbour says whether you’re a public or private company, the same things drive your business.
“You have to grow sales. You have to take care of your customer. You have to introduce new products. You have to do the fundamentals and execute well,” he says.
The biggest difference between a private and public company is you are communicating to a slightly wider audience, the investor base, Barbour says. (ADS doesn’t have as much public float, or shares in the hands of public investors, as other public companies.)
Barbour also makes it a priority to have good communication and relationships with the board. He saw the CEO of Emerson Electric, David Farr, benefit from that approach, so he’s tried to do that same thing at ADS.
To grow sales, the company is building off of its base. About 85 percent of U.S. construction occurs in what Barbour calls the crescent — North Carolina, Florida, across the Southeast, Texas, across the Southwest and up through California — with Colorado as the outlier.
So, ADS has prioritized its resources, sales initiatives, new products and even its lobbying around regulatory processes in those areas.
The other piece is adding tools and processes to scale ancillary products — products for storm water retention, detection or capture — faster.
“There’s a certain type of investment and focus you need to drive that solution set, versus just our traditional pipe products. So that’s very high on our agenda,” he says.