Qualtek, a 70-person, Colorado-based manufacturing company, looks to sustainable business practices as a way to enhance its market competitiveness and financial performance. The sustainable business journey began with electric and water cost reduction programs, and has also addressed risk mitigation, waste management, corporate culture and employee well-being. This is the story of the company’s roadmap.
To hear pundits tell it, you’d think manufacturing is dying in the U.S. and, indeed, it is true that a significant number of manufacturers have gone out of business in the past 30 years in this country. So it’s no mean feat that Tony and Mary Fagnant and their team at Qualtek Manufacturing have not only survived, but continue to grow the company.
Qualtek is based in Colorado Springs, Colorado. It has four main lines of business: heat treatment, metal finishing, stamping and wire EDM (electric discharge machining), all types of business that you could find 30 years ago in thousands of small manufacturing shops across America. Most of them are now long gone. Qualtek was founded in 1970 and was acquired 13 years ago by a group of seven investors who remain the company’s stockholders. Among the investors were Tony and Mary Fagnant who are currently executives in the company. Tony is the CEO. Qualtek has been through good times and bad times and, like many other companies, suffered in the economic downturn of 2008-2010. However, in the past three years, it has added $3 million in revenues and over 20 new employees.
The story of how Qualtek reached the point where it determined that stepping onto the sustainable business track was the right strategic course for the company is really a reflection of the tenacity, imagination and innovative spirit of Tony and Mary, their family, employees and co-stockholders. They had always strived to make Qualtek a quality operation with a focus on excellent products and top-notch customer service. These attributes have enabled the company to secure and retain demanding customers like GE Medical and a medical device division of Johnson & Johnson.
But a little over two years ago, Tony and Mary seized upon sustainability as the way to drive the business to the next level of excellence. As it happened, their son Chris was making a career change at the time and joined the company to lead the sustainability charge, which has already achieved startling results. Tony and Chris firmly state that, unlike the founders/owners of some other companies with a strong sustainability program (e.g. Kim Jordan of New Belgium Brewing or John Macky of Whole Foods Market), they weren’t born with sustainability built into their DNA. Their commitment to a sustainability-based strategy was inspired partly by the fact that Chris had spent several years working at Chipotle, another Colorado company famous for its highly successful sustainability-based model; and partly by the Qualtek leadership’s relationship with Blue Star Recyclers, a small Colorado Springs-based electronics waste recycler (and their joint marketing effort called Q-munity®) that also had a strong commitment to sustainability principles. In fact, it was a trip to the Pacific Northwest with Blue Star’s CEO Bill Morris, and visits to a number of electronics recyclers and the Basel Action Network, a non-profit that works to find more sustainable ways of dealing with obsolete electronic equipment, that finally cemented the Fagnants’ resolve to embark on a sustainability strategy for their company.
Like many smaller companies that develop an interest in sustainability, Qualtek wasn’t sure how to get started and what resources were available to help. Eventually it turned to Natural Capitalism Solutions, a consulting firm founded by long-time sustainability guru Hunter Lovins, and joined one of its Sustainability Circles together with five other local companies to learn about the many different ways in which sustainability could enhance their business. Due to a lack of real commitment to the process, three of the initial six companies soon dropped out of the Circle.
Part 2 of this case history will describe Qualtek’s initial forays into sustainable business, taking advantage of low hanging fruit opportunities in energy efficiency and water conservation.
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Sustainability4SMEs: Graham Russell & Martha Young
Graham Russell brings 25 years of CEO experience in the environmental services industry to his current role as a sustainability professional. He currently teaches sustainable business in the University of Colorado, Denver MBA program and chair’s the School’s Managing for Sustainability Advisory Council. He provides sustainability and cleantech consulting services to SMEs through TrupointAdvisors and is on the board of the International Society of Sustainability Professionals.
Martha Young has been an industry analyst and writer for 20 years. Her expertise is in small and mid-sized businesses, information technology and energy. Young co-authored four books on virtual business processes (cloud computing), and project management for IT. She is on the board of two small Texas-based businesses, and acts in a technical advisory and business strategy capacity for an east coast venture capitalist.