When Keith Callaway Sr. left his minimum-wage job to start a construction business, he had some hand tools, a borrowed roller and a truck with an electric slide-in dump bed.
“Because it seems like we never do the same thing from one day to the next.”
During those early years in the 1980s, K&L Industries really did do just about anything for a buck, from paving to roofing, to whatever jobs came its way.
Keith and Lillian Callaway ran the business out of their home in Canby, Oregon, while at the same time raising their seven children. The couple and their business have been through a lot over the decades, including long years of financial struggles and nearly losing the business when son and business partner Keith Callaway Jr. suffered from drug addiction. He’s clean now by more than eight years and has helped the business grow into a $15 million company with about 40 employees. His struggles have also led him and his parents to reach out to others as a second-chance employer. More than half of K&L’s employees are in addiction recovery or formerly incarcerated.
“We've gotten pretty practiced at bringing people in out of recovery and out of prison and other things like that and working with them,” Keith Sr. says.
The company’s motto is “Transforming lives one shovel at a time.”
Along with giving second chances, K&L has implemented a new strategy and organizational structure based on the Entrepreneurial Operating System. The system has positioned the company for growth beyond their mom-and-pop roots, leading it to top its annual goals each year. For those reasons and more, K&L is also one of Equipment World’s 12 finalists for the 2023 Contractor of the Year award.
Paying it Forward
Being a second-chance employer has allowed Keith Callaway Jr. to help others who struggle with addiction.Equipment World
“I stole. I borrowed permanently. I did my best to put the business out of business.”
During his active addiction, K&L came close to bankruptcy, and Keith Sr. and Lillian struggled to keep it running while also trying to help their son.
“We were barely surviving,” Lillian says. “Truly only by the grace of God did we survive that.”
In 2015, Keith Jr. entered treatment. Sober since, he has shown strong leadership in the operations side of the business. The experience also has played a major role in how the company hires and retains employees.
In helping her son, Lillian learned that the judicial system with its constant additional fees and mandatory appointments during working hours makes it difficult for people caught in the system to keep a job.
“If he didn't have us behind him, he wouldn't have made it,” she says. “And it was because we lived it that we gained an understanding that these people who want to recover, they can't recover if they don't have someone to support them and help them and understand where they're at.”
The company helps its employees meet their court-ordered obligations by giving them time off and assisting in other ways. It also makes an effort to get to know the employees, not just as workers but as family members. It’s a relationship built on trust.
“I will trust you 100%,” Lillian tells each new employee. “I don't care about this record. But if you blow it, I will be your worst nightmare. So don't try me.”
So far, no one has tried, she says.
Benefits of second-chance employment have been low turnover and ease in filling openings.
But the biggest benefit has been watching the effect on the employees.
“It totally fills our bucket up,” Lillian says. “There's nothing better than seeing someone's life be transformed and be flourishing and helping them to feel successful, to watch them grow and see the lights come on as they learn to do things and feel valued.”
The effect on Keith Jr. is also a personal one.
“It's allowed me to pay it forward,” he says. “It gives purpose to the past that I have.”
"They Move Fast"
“Once the job starts, it's a fluid motion until the moment they load up to go home.”K&L Industries
He had previously worked in the office on sales, but his heart was really out in the field. Keith Sr., who had traditionally held that role, realized a switch was in order.
“We always assumed I was the guy with the boots on, that I'd be out in the field,” Keith Sr. says. “But he is so much better than me in driving production and seeing things ahead.”
K&L typically has 10 to 12 workers on its paving crew including truck drivers. The team did about $12 million in revenue last year and still had room to do more.
“So we're going to have to set bigger goals next year because our team can accomplish it,” Keith Sr. says.
The large paving team is so quick that from the time the paver completes its job it is loaded and headed to the next project in 8 minutes. Each member works as part of a whole with little talk needed. All the equipment is quickly cleaned by operators, then the truck drivers load the equipment, and they’re off to the next job.
“Once the job starts, it's a fluid motion until the moment they load up to go home,” says Scott Dahme of Scott Dahme Construction. “They move fast.”
Keith Jr. says it’s typical for the crew to do up to seven to nine jobs in one day, if there are small patches sprinkled in.
“We run a big crew so that we can produce a lot,” he explains. “We operate with the ‘never forget where you came from’ principle. My dad started with a pickup and a dream, and we still do the same, go and patch a hole in the parking lot that he would have in 1984.”
He also believes in nonstop cross-training, offering employees a chance to increase their skills and move up within the company. Often an employee will mention that another worker is showing talent or interest in learning a new skill. He will meet with the worker and trainer to set out realistic goals of how long the training will take and how to work it into the schedule.
“I love putting teams together and developing people,” he says. “I really appreciate watching people blossom and grow. And I think I have a unique ability to look at someone and say, ‘Here's how much potential you have. Are you willing to let me call that out of you? Can I push you a little bit to stretch you in these ways, so that you can become the whole person that you thought you could be?’”
Entrepreneurial Operating System
An annual revenue chart shows K&L Industries' growth in recent years.Equipment World
About two years ago, it implemented the Entrepreneurial Operating System. It developed a new organizational chart, doing away with traditional titles like supervisor and foreman. They prefer the term “manager” for those positions, because the focus is on people, be it customers or employees.
The leaders also got some unconventional names to better describe their roles.
Keith Jr. is “integrator,” and Keith Sr. is “visionary.” Lillian is “head of finance.”
The clearly defined roles help each person know their responsibilities and keep them in their own areas. EOS also helped the company clearly define its goals in one-, three- and 10-year intervals, which are presented openly to the entire company.
“We want our company to know what we're headed for and what our goal is for the year financially and infrastructure-wise, so they can be part of something,” Keith Sr. explains.
Under the new structure, the company jumped from $8 million in annual revenue to about $14.5 million after two years. Annual revenue goals continue to trend upward and include plans to add a concrete division.
Despite the increased volume, the separation of duties has enabled them to have more of a work-life balance.
“It's definitely been a difficult transition period to go from the typical mom and pop to the second generation,” Keith Jr. says. “But I have more time available now than I ever had before inside our business. Because rather than giving people solutions or tasks, I give them the vision and then say, ‘How are you going to take us there?’”
"The next phase for us is figuring out how to grow this even further, make it a destination, make the career of becoming someone in the trades something that people aspire to be or to do." – Keith Callaway Jr.Equipment World
