They Tried to Undo 100 Years of His Family’s Work - Herb Sargent (DT 444)

Summary

Podcast Summary: Dirt Talk by BuildWitt

Episode 444 – They Tried to Undo 100 Years of His Family’s Work – Herb Sargent
Date: May 21, 2026
Host: Aaron Witt
Guest: Herb Sargent (Board Chair, Sargent Corporation; Co-host, Starbuck & Sargent Podcast)

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Episode Overview

In this wide-ranging, in-depth episode, Aaron Witt sits down with Herb Sargent, whose new book The Hard Work Starts Today documents the 100-year journey of his family’s company, Sargent Corporation—a now nine-figure, employee-owned civil construction powerhouse in Maine. Herb discusses buying back the family business (six times the size of his own), nearly losing it all when a German parent company threatened his grandfather’s legacy, why real leadership (not workforce shortage) is the industry's core challenge, and how employee ownership may be the construction industry’s last hope for rebuilding the American middle class. The conversation also explores family succession, business crises, leadership, employee ownership, resilience, and the soul of building for generations.

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Key Discussion Points & Insights

Leadership & Succession in Construction

• Dealer/Manufacturer Succession Lessons ([03:00-04:00])
  Both the host and Herb praise heavy equipment dealers like CAT and their systematic, non-negotiable approach to succession planning, emphasizing that other companies should embrace this model.
  • “If you don’t have a succession plan...Cool. It’s going to somebody else then...That’s a conversation every company could benefit from.” – Herb ([03:22])
• Leadership as the Core Issue ([06:00-07:40])
  Despite common concerns, Herb insists workforce shortage is not construction’s biggest problem:
  • “Leadership in these companies is being so consumed…I call it being crushed. I can’t tell you how many of these people I’ve talked to that literally said, ‘I have no idea what I’m doing.’” – Herb ([04:44])
  • Many business owners struggle to transition from being a craftsman to a leader; imposter syndrome is common.

The Sargent Family Business Story – Growth, Crisis & Reinvention

• From Origins to Today ([09:00-16:00])
  The Sargent business began in 1926 with an REO Speedwagon truck. Early challenges—workforce, finance, technology—still echo today.
  • “The business…started the same way a construction business starts today...all the issues they had in the early days are all the same.” – Aaron ([10:10])
• World War II Stories ([11:08])
  During WWII, the company hired prison labor to cope with the labor shortage—a now-humorous, then-desperate solution.
• Humility & Generational Challenges
  • Reviewing family journals gave Herb perspective on both business challenges and the people behind them, fueling his drive to preserve principles like not running from problems ([15:05-16:00]).

The Near-Undoing: European Takeover & Buyback

• Foreign Acquisition & Culture Clash ([23:00–35:00])
  Herb describes the sale of H.E. Sargent to a French firm that soon faltered, passing control to a German multinational with a dramatically different, transactional culture.
  • “If I was going to shake someone’s hand, I wanted it to mean something. That’s what I’d been taught…Now, a German could show up and say, ‘No, that handshake doesn’t mean anything anymore.’” – Herb ([33:32])
• Walking Away & Starting Over ([36:00–42:00])
  Disgusted by new management’s ethics (like bid shopping), Herb quit and founded Sargent & Sargent from scratch—armed with little more than grit and a conviction to “do it right.”
  • “He said, ‘That’s the way the world is now.’ I said, ‘I’m not going to do it…Here’s the bid, here’s the spreadsheet. I’m not going to do that.’” – Herb ([41:20])

Scrappy Beginnings, Financial Struggles, and the First Big Break

• Winning the Walmart Job ([49:00–55:00])
  Despite no equipment, crew, or assets, Herb won a $3M Walmart project by convincing the GC: “If you hire me…you won’t have to lay awake at night worrying about it, because that’ll be my job. I will take that over for you.” ([51:48])
• Family Dynamics and Sacrifice ([55:00–59:00])
  Herb’s father reluctantly helped by parking assets at the bank in exchange for manipulating the ownership structure, a move Herb candidly calls out as both a mixed blessing and a lesson in equity.

The Grand Buyback: Reclaiming Legacy at Scale

• The Buyback Story ([82:00–90:00])
  Sargent & Sargent, then a $20M company, bought back H.E. Sargent’s $120M operation from its struggling German parent.
  • “We were basically evaluating two risks: not doing it…we’d probably have to cut our company in half…or buy them and try to make it work.” – Herb ([83:14])
  • Focus was on boosting efficiency: “Why don’t you just want to improve your margin first?…Improve margin before taking on more risk.” ([90:44])
• Reception and Execution ([89:00 and 91:00])
  Employees responded positively, especially to the return of local ownership, new equipment, and restored pride.
  • “It was local ownership now…People in the shop could drive up to the office and…we can make that decision right here.” ([88:48])

Surviving Recessions, Risk, and Debt ([100:45-110:00])

• Tightrope Years & Survival Mode
  Multiple prolonged periods of financial stress tested Sargent’s mettle and forced hard lessons in cash flow, debt management, and risk.
  • “It’s just…mentally hard to breathe. It occupies your mind in a way that doesn’t let less-intrusive thoughts in…There were quite a few years of that.” – Herb ([105:21])

The Real Workforce Challenge: Not Recruitment, But Leadership ([110:12–113:52])

• Demographic Crisis & The Skill Gap
  Herb candidly admits his mistake: failing to invest significantly in workforce development pre-2014, leading to a people bottleneck when the industry recovered.
• Innovative Talent Development ([131:30–113:08])
  Turnaround: Launching an academy and workforce development under leaders like Kevin Gordon; drastic positive shift in company’s age distribution.

Employee Ownership: The Only Path Left to the Middle Class? ([113:52–127:21])

• Selling to an ESOP ([113:52–128:01])
  Sargent became 100% employee-owned in 2013—not as a get-rich-quick move, but to ensure company durability, succession, and broad-based prosperity.
  • “ESOPs don’t pay taxes. That’s how you can pay off the owner…but it also builds a really substantial, durable company…benefits the people doing the work.” ([121:21])
  • “I think every company ought to be an ESOP…If you think about capitalism…that benefits the people that are doing the work, and the wealth being distributed at that level. You’re building a whole new class.” ([123:22])
• Critique of Industry Norms & Vision for the Future
  Boldly critiques previous generations for extracting wealth with little reinvestment, arguing that only broad-based ownership (like ESOPs) can rebuild the middle class and enable real financial security for builders.
  • “I would argue…you are building the middle class. I don’t think there’s a middle class in America anymore.” – Aaron ([124:12])

Reflections on Family, Journaling, and Perspective ([61:32–74:10])

• Work-Life Balance & Emotional Resilience
  Herb emphasizes deliberate perspective management, using gratitude and family focus to insulate home life from stress.
  • “No matter how tired I am, how late it is…If I get home and [my daughter] wants a horsey ride, she’s going to get a horsey ride.” – Herb ([63:04])
• Journaling & Self-Reflection
  Maintaining journals and to-do lists as a means of reflection and growth.
  • “James Clear says…the events of your past are fixed, but the meaning you assign to them is up to you.” – Herb ([72:03])

Memorable Quotes & Moments

• On Taking Risks & Trust:
  • “Everything I owned was on the line….just take little Monopoly hotels and slide them across the table, that’s what it was.” – Herb ([87:22])
• On Adversity & Grit:
  • “I can so relate to not having money, to not having the right people, to not...yeah, I can so relate to that.” – Herb ([60:37])
• On Industry Pride and Responsibility:
  • “Our people in this industry are the hardest working, biggest-hearted, and most misunderstood people. If you can go to work with the spirit that, ‘I can make a difference…even small me,’ the things we can do are amazing.” – Herb ([132:52–133:33])
• On Leadership Failure:
  • “The biggest impediment for us making the world a better place…is frankly, it’s a leadership problem. And it’s not that they don’t mean well. They’re just being crushed.” – Herb ([130:07])

Notable Timestamps

• Dealer succession & leadership: [03:00–07:40]
• Company origins to WWII: [09:00–16:00]
• Selling to France, German parent culture shock: [23:00–35:00]
• Starting over, Walmart job win: [36:00–55:00]
• Ownership struggles and buyback: [82:00–90:00]
• Employee buyout/ESOP transition: [113:52–128:01]
• Workforce development & demographic turnaround: [110:12–113:52]
• Leadership legacy & message to the next generation: [130:07–134:47]

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Final Thoughts & Call to Action

Herb Sargent’s story, as told in this episode, is not just about preserving a family legacy or surviving business crises. It’s a deeply personal testament to the power of ethical leadership, humility, and a willingness to do hard things for the long haul. Herb’s journey offers a roadmap for others: value people over short-term wins, never forget where you came from, and recognize that the future of the industry—and America’s middle class—depends on investing in those who build our world.

“I wish I brought my heart forward first instead of the business forward, but my heart’s in it now.” – Herb ([134:47])

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Connect with Herb

• LinkedIn: [Herb Sargent]
• Podcast: Starbuck & Sargent

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Transcript

[Interviewer]

This episode of the Dirt Talk podcast is with Herb Sargent. Herb is the board chair of Sargent Corporation, a 100-year-old employee owned civil construction company in Maine and the co host of the Starbuck and Sargent podcast. He bought back his family's company six times the size of his own the same year a German owned parent company tried to undo everything his grandfather built. He reveals why the construction industry's biggest problem isn't the workforce shortage, it's leadership. And why employee ownership might be the only vehicle left to rebuild the American middle class. His new book, the Hard Work Starts Today documents the 100 year Sargent journey from simple REO Speedwagon to a nine figure business. Herb sent me one of the first copies of his book. He told me about it quite a while ago. He spent years working on this thing and I told him I want to read it and I want to talk to you about it once it's done. And here we are. So I read the book before this episode and I let him walk through the book for a few hours, which was a blast to hear it from the horse's mouth, so to speak. It's an incredible history, an incredible story. Before Herb got involved, during Herb's involvement. Now where Sergeant is going to in a lot of ways without Herb. It's really cool stuff. So enjoy this episode with Herb Sargent of Sargent Corporation. I found like the really good dealers. They do especially as the next generation has taken over. They're like, I do need to be out and about a little bit more. And then some are like no one's seen them in years.

[Herb Sargent]

Yeah.

[Interviewer]

And I, I just don't. I mean that's the benefit of a giant brand and a very long standing company, I guess. And, and the right to sell that brand within a territory.

[Herb Sargent]

Yeah.

[Interviewer]

Without competition. It works really well for them.

[Herb Sargent]

It does. And you know, they, they've done a great job. You know I, primarily with Milton and Carter. Yeah. Those are the ones I've dealt with the most. But, but they've. CAT has done a great job really having excellent parts availability and service. Right. I mean that's, that's the thing that differentiates them. So I mean their equipment's great too.

[Interviewer]

Yeah. Move that microphone a little closer to you, if you don't mind. Yeah, there you go. Well, and their succession planning is unbelievable. Yeah, it is, it is really impressive how good their succession planning is. And because I think they're really smart. They know that's their golden goose. They know that's their edge in the world market, is their Dealer network. And they have held those keys as tight as anybody and I think with obviously some pretty good results.

[Herb Sargent]

And they want to know the plan right. At the dealer level. What's your succession plan? That's what you're talking about.

[Interviewer]

Exactly. And if you don't have, and I mean their succession plan, it is, it's systematic abc. We have to sign off on it or else it's not happening. And if you don't have a succession plan. Cool. It's going to somebody else then.

[Herb Sargent]

Right.

[Interviewer]

It's not sticking around like you, you don't, you better, you better put together a really, really worthy next generation. If not, it's going elsewhere. And that's happened now a few times within the past few years.

[Herb Sargent]

But that's a kind of couple conversation that you know, every company could, could benefit from.

[Interviewer]

I agree.

[Herb Sargent]

The succession thought and really it starts with, you know, you see so many people in this business now, you know, and I'm working in these peer groups and, and I hear, and I've talked to a lot of companies. I think, you know, I've got on about 30 leadership calls this winter just to kind of get a feel for what's going on out there. And, and people are just, a lot of them are just like, they start in business as an opportunity and they don't know where it's going. They don't know. And all of a sudden it's become more than they thought it was going to be. You know, they're on this rocket ship that they can't change the course on or change the altitude on. And they, in the beginning, and I was this way too, I never thought about what happens when I'm done, you know, what's going to happen to this company. And I'm talking about back when I started in my 20s. Yeah.

[Interviewer]

And it's a different skill set to like digging a hole and running a business.

[Herb Sargent]

Oh yes, totally different.

[Interviewer]

And running a 25 person business versus running 100 person business.

[Herb Sargent]

Yeah.

[Interviewer]

And running a business in one city versus three states. Like they're all different skill sets.

[Herb Sargent]

Yeah. And most of the people that start in this business don't really have a good financial mind. I mean that's, that was me. Yeah. And you know, we don't understand the financial ratios. I mean I've had to learn a lot about that over the years. Right. But it's a place that I think the industry could use a lot of, a lot more focus on the leadership. So that, because I think the leadership in these companies is being so Consumed. And I call it being crushed. Like, I can't tell you how many of these people I've talked to this winter that literally said, I have no idea what I'm doing.

[Interviewer]

Well, that's everybody.

[Herb Sargent]

Yeah.

[Interviewer]

As I've learned.

[Herb Sargent]

But it's. I mean, that's a pretty humbling place to be. And, you know, when you know how to build and you're confident about how to build, and all of a sudden you find yourself in this. This arena that you have zero confidence in. It's, you know, and then you got the imposter syndrome thing that, that takes over. And, you know, people look at like, what are we going to do next, boss? And you're like, well, I'm just trying to figure out, like, the next minute.

[Interviewer]

Yeah. And.

[Herb Sargent]

And.

[Interviewer]

And you can't. You can't tell your people that at the time, too.

[Herb Sargent]

Right.

[Interviewer]

You need them to build the work.

[Herb Sargent]

Right.

[Interviewer]

And if they're worrying about the next minute, they can't build the work. But then it's. It's an interesting dynamic. And I think, though, that. That one of the. The challenges I've seen in the civil construction industry is these, These, These business owners, they try to do it all themselves.

[Herb Sargent]

Yeah.

[Interviewer]

And that, to me, I don't. You can't. Like, you can't be a brilliant builder and do everything else they're trying to do.

[Herb Sargent]

All them. They try to do it all themselves until they get to the point where they bring somebody in to help, and then they do. Then they try to do nothing, or

[Interviewer]

they still try to do it all, and they don't really let them help.

[Herb Sargent]

Yeah. That's. Says those two things. Either they just see total control and go, I'm gonna be out on the boat, or they just micromanage and everybody's still crushed.

[Interviewer]

Yeah. And I think I've seen micromanagement more than I've seen the other one, I think.

[Herb Sargent]

Yeah.

[Interviewer]

Yeah. I just. There are so many people in this world, they just. They just really struggle. And I've tried to. I've tried to. I think you've done this really well. I mean, you. You brought on Tasha and you brought on Eric and you brought on others, but, like, you get all the credit, I think, a lot of times for

[Herb Sargent]

what's happening way more than I should. And I mean that.

[Interviewer]

But that's. What I mean is, like, you. You created this foundation, but when did the company really start to grow? And sure, there were. It's a complex equation, but when you brought some of these other really key people in that now run the company.

[Herb Sargent]

Yeah, well, I mean it started back in my sergeant and sergeant days, right when I. And. And I left he sergeant, my family's business that had sold to the Europeans and. And I had no idea what the hell I was doing. I mean I was the same person that I'm hearing now. The only difference is there was no economy there to, to get in my sales. I mean I had like a couple opportunities like a Walmart came out to bid and I was like, I, I think I can do that. But there wasn't, you know, all the opportunity there is now. And I struggled for years because I didn't have anybody to count my money, you know, to count the money I didn't have and to just help me strategize in that. And I was about eight years and George Thomas and Tim Folster had both worked at he sergeant and had both left and they joined me and that's when I turned into what I'd call I turned into a contractor.

[Interviewer]

And this story's kind of prompted you being here in a way maybe. I think it's just nice to hang out too.

[Herb Sargent]

I do too.

[Interviewer]

But you've spent the past few years documenting the hundred plus year journey that is Sgt. Now you sent me the book. It's one of the only few out and about right now.

[Herb Sargent]

It's one of two.

[Interviewer]

Two.

[Herb Sargent]

So one of two. I am, I am right now. It's you and Benjamin Holgren.

[Interviewer]

I am honored, to say the least. I am, I am honored to be on the list. I read it this weekend and one and I made just some notes to even think about here, which I rarely do for podcasts. But one of the things, one of the thoughts I had. So the business started, it was over 100 years ago. What in 1925-1920-1926-1900 years this year. 100 years this year. It starts with we just had a

[Herb Sargent]

big ass party on April 10th.

[Interviewer]

Yeah, that was, that was okay. It starts with an REO Speedwagon.

[Herb Sargent]

Yeah, which it's oddly enough. I was somebody, I was talking to somebody and they said. So they named the truck after the band and this is somebody in the business. And I said, no, no. And I had a picture of the truck and I was like, see, it says reo. That actually existed before the band did. Yeah, by 70 years.

[Interviewer]

Sure. But. But it starts, it's funny, like the business kind of starts the same way a construction business starts today. And then all the issues that they had in the early days are all the Same.

[Herb Sargent]

About the same. Yeah. Yeah.

[Interviewer]

That was one of the things. It was like there's almost nothing different.

[Herb Sargent]

Well, as you go through it, it's, you know. Well, I started the two yard dump truck and that wasn't me. But you know, we different stuff now. But didn't really know the business world. Didn't, you know, and having to learn some things. And I think I said in here, Herb was like, he was, he was very intent about after five years in business, having five years of experience, not one year of experience five times. And so he was very reflective on his business, much more than I was. I was just all like, what's coming up to bid today? You know, and you know, there's talk about workforce problems. You know, during World War II. Yes. There's.

[Interviewer]

They go. They went and got prisoners.

[Herb Sargent]

Right.

[Interviewer]

Which I thought was hilarious.

[Herb Sargent]

Check folks out of jail. Yeah. To go to work because all the men were off fighting and you know, financial issues. My grandfather's wife, my grandmother was, Was very ill. She had some mental incapacities. And, and that was a challenge for him. He had five kids back home. There was no interstate back then, you know, to. And, and I guess the, the way I wrote it, like the day he was born, the society he was born into was the same as it had been for centuries.

[Interviewer]

Sure.

[Herb Sargent]

You know, there was no cars, there was no electricity, there was no nothing. And. And it's a little bit different for us now. Right. We were in a different society, but same problems. Well, I guess is your.

[Interviewer]

But. But it's so funny because I was talking to somebody the other day about this. Like, I think we give technology a lot of credit, but the world hasn't. Since I was born in 95, the world is almost identical to what it was in 1995. If you, if you look at it materially speaking, the biggest change is we have a computer in our pockets that gives us communication and the world information. But houses kind of look the same.

[Herb Sargent]

Yeah.

[Interviewer]

Planes kind of look the same. Cars kind of look the same. Cities kind of look the same. Like people kind of look the same. Everybody. Everybody. Like, like the world is not all that different. And so I just. It's really easy to believe that this has always been the world then.

[Herb Sargent]

Yeah.

[Interviewer]

Because it's all, you know, but it's, it's really humbling to recognize that, like, wait a minute. This is all still very new.

[Herb Sargent]

Yeah.

[Interviewer]

Being able. Being. Being able to talk to someone halfway around the world.

[Herb Sargent]

Right. So, you know, the idea that he's driving on a weekly Basis for, I say, four hours to Boston. That's what it is now for us. But he was driving on an old coastal route, one that was barely built to any kind of standard to get to Boston and, you know, without the advantage of the interstate system, which he eventually buil, you know, it was just. It was when I've got his journals from about early 1940s until about 1999 when he stopped keeping one. And then my dad started keeping journals also. So I had those journals to pull from. And we had a book commissioned about 10 years ago, a biography about my grandfather. So that research was available to me also. So that made it easier. But it's hard for us to. I think it's hard for us to. To wrap our minds around how primitive it was in 1906.

[Interviewer]

Yeah.

[Herb Sargent]

I mean, literally, the Wright Brothers had flown 120ft three years before.

[Interviewer]

Refrigerators weren't a thing.

[Herb Sargent]

Right.

[Interviewer]

Hot showers weren't really a thing. Like it. Yeah.

[Herb Sargent]

Running water, wasn't it?

[Interviewer]

Running water, yeah. Yeah. How often were those journal entries? Was it sporadic?

[Herb Sargent]

Was it consistent? Well, he was consistent, but then all of a sudden, you know, you'd get a point where. Where he'd apologize for having missed two months or something like that. But he. He was pretty good. And my dad was actually better about keeping. And dad was much more detailed, Jim. He was much more detailed in what went on during the day. My grandfather was like, you know, went to Norge walk and spent the night and had dinner with the boys. You know, that was. And we've got, you know, this. This Marion shovel is down and Uncle Bob has got nothing to do right now and, you know, stuff like that.

[Interviewer]

But it's the. It could be the. This cat D6 is down.

[Herb Sargent]

Yeah.

[Interviewer]

Jeff has nothing to do, Right.

[Herb Sargent]

Yeah. The same thing today, right. Exact same thing today.

[Interviewer]

What was it like reading. Just reading those. Those entries for the first time?

[Herb Sargent]

It was, you know, it was cool with my grandfather. He included some family stuff in there too, and some of which probably was never meant to be read, you know.

[Interviewer]

I can imagine. Yeah.

[Herb Sargent]

But, you know, I tried to, like, not focus on that stuff too much, but the, you know, the business aspects of things, you know, talking about. Got a visit from. From the Merchants bank president on the job today, and he offered me a line of credit. And like, he didn't even know what that was, you know. So reading through it and the progression over the years and how we would then, you know, like 15, 20 years in going to Boston to get involved in associated general contractors Or Augusta Main. And then the way he began to. To kind of grow the business and learn about what control meant in a contractual situation, you know, as a subcontractor, he was forced to do some things that. That cost him double. And, and that was, you know, reflected in the. In those journals. Like this is not the way this was intended, but I guess I got to live with it, you know. And that's. That was one of the enduring qualities that he always had is, is I'm not going to run away from a problem. I'm going to deal with it. And I may not like it, but we're going to finish this job. And I think that spirit, you know, we've got a job. I think you visited a few years ago in Portland, right by the bay. Yeah, it was a very bad job for us. Very bad job. Like we lost a lot of money.

[Interviewer]

Yeah. Well, explain the. The day of the issue was identified.

[Herb Sargent]

Yeah. So a little bit ahead of ourselves, but yes, it was. So we're digging for some cast in place tanks right beside the bay. So between the interstate that we built in the bay and it's a soccer field, and they want some big combined sewer overflow tanks in there to, to.

[Interviewer]

And for people that don't understand a cso, it's when you have a big rain event.

[Herb Sargent]

Yeah.

[Interviewer]

It overwhelms that. All of that water, in theory goes to the treatment plant to treat it before discharge into the. The bay there. Or the ocean.

[Herb Sargent]

Yeah, that's. Yeah, the bay is the ocean.

[Interviewer]

The ocean. But during a rain event, you overwhelm. Because a wastewater treatment plant can only process at a certain gallons per hour. Gallons per day. You overwhelm it and with nowhere to go, you just flush it into the bay. Which then causes all kinds of biological environmental problems. So you store it now and then you can process it during the rain event.

[Herb Sargent]

So that's the third project we've had in that. Right at the bay there. Yeah. But this one was a design build project, cast in place tanks. The other ones were pre cast tanks. So big sections of pre cast box culverts that had caps on them. This one was very, very sensitive soils.

[Interviewer]

But these are huge.

[Herb Sargent]

Huge. Yeah, these are. I'm gonna say each tank is 80ft by 180ft, something like that. So there's four of them set in a big rectangle. And we were so focused on the interstate side, because when we take the weight, when we excavate for these things, we're relieving a lot of weight. That's holding the slope of that interstate in. And there was a big fear of a rotational shear and having the interstate come visit us in the hole.

[Interviewer]

Sure.

[Herb Sargent]

And we didn't want that, of course. And then we would have been blamed for a bad interstate in the 1960s. But. So we focused so much on that side that I don't think we focused enough on the other side, which ended up having poorer soils. So we got the two tanks next to the interstate done, set up the sheeting for the other two tanks that are closer to the bay, and started to excavate them all down. And then, you know, we'd have to take it down in stages and put some bracing in. And take it down another stage and put more bracing in.

[Interviewer]

Yes. You drove sheet pile around the excavation.

[Herb Sargent]

Yeah.

[Interviewer]

And then removed the middle and so

[Herb Sargent]

a big cell that we had. And then one day, I think it was March 3rd, they went to. They. They excavated down about five more feet in this corner. And when they came in the next morning, the ground outside the. The cofferdam, the sheeting was five feet lower, and the ground inside the cofferdam was five feet higher. And all the sheeting was twisted and turned. And, And I mean, it became a massive safety issue for us even to get, you know, anywhere anybody in the hole at all. So. So it was a very expensive remediation. We finished the project last spring. But I think what brought, what brought us into this is Herb never walked away from a problem. And this was the kind of job even the city of Portland, who were under contract with. Two hours, two years late on this job. And they, they, they acknowledged that they didn't know of anybody else that might stick it out.

[Interviewer]

What's the alternative?

[Herb Sargent]

You just pull the gauntlet away? And I guess, you know, we never considered the alternative. Yeah, there was no other alternative for us. It was, we've got to finish this job. And, and it was a very significant loss for us.

[Interviewer]

Well, and, and that's. But that's an important point because if you were less well capitalized, if you. If the business wasn't as healthy.

[Herb Sargent]

Yeah.

[Interviewer]

It could have. It could have tanked the whole company

[Herb Sargent]

probably five years earlier. It might have taken us under.

[Interviewer]

Yeah. Yeah.

[Herb Sargent]

And we've. We've took on a lot of debt to buy he sergeant. I did, you know, Sergeant. Sergeant bought he sergeant took on a lot of debt to make that happen. Three years after that, the recession comes. You know, so we survived the recession. And I always say I've been in survival mode since 1992 until about 20, 19, 20. And we began to be able to backfill some of that debt service and extinguish that debt, you know, paid it off. And so we were able to kind of stack up some cash and we were careful with what we took on for equipment and, and begin to build some financial heft. And luckily we did because that would have been brutal.

[Interviewer]

So we're skipping ahead a little bit about 100 years. Yeah, yeah, yeah. We're bouncing around, but so her builds the company into a sergeant and sergeant or he sergeant. He's what you were calling in here into a pretty big contractor.

[Herb Sargent]

Yeah.

[Interviewer]

Like it was a sizable company.

[Herb Sargent]

Yeah. I think they had about 300 employees at their height.

[Interviewer]

And then again they had a very similar problem. That was succession.

[Herb Sargent]

Yeah.

[Interviewer]

There were what, two sons.

[Herb Sargent]

So one son.

[Interviewer]

One son.

[Herb Sargent]

My dad, Jim.

[Interviewer]

Okay.

[Herb Sargent]

And then his brother in law.

[Interviewer]

Brother in law.

[Herb Sargent]

So it was his sister's husband.

[Interviewer]

Okay.

[Herb Sargent]

That came in. And they both worked in the business from the, I'm going to say late 50s.

[Interviewer]

Yeah.

[Herb Sargent]

In different roles. Ralph, my. My uncle, my dad's brother in law was, Was more on the equipment side and my dad was more in the operations side.

[Interviewer]

But they had, they both had other ventures going on eventually. Yeah, eventually. And that led the original Herb to sell the company to what a French.

[Herb Sargent]

No, so Herb actually sold the company to Jim and Ralph. Oh, so Jim and Ralph. Jim and Ralph took the business over in the, in the mid-70s and then that's when they started to get a little outside interest. So my dad started a separate vertical bridge building company that was his alone. So he And Ralph owned he Sergeant 50. 50. And then he started that business and that needed capital. And the nature of a business is one partner takes capital out of distribution, the other one has to also. And so Ralph had some, some outside interest too. He was developing a waste to energy incinerating plant and then was also trying to develop a landfill to take that ash from that plant. So you know, both of them were going different directions outside the business. And, and eventually I think this, that's when I think succession became more of a problem. I mean I was 25 years old at the time. I was a superintendent in the field and. But the company was so much more complex now than it was when Jim and Ralph took over in the 1970s. It was just kind of at that time it was mostly he sergeant. They had a, they had a separate equipment company, but it was mostly just he sergeant and now, you know, they've got, they bought two or three other Bolt on acquisitions. And now it's just so much more complicated. And I think, you know, if I'm brutally honest, Jim and Ralph didn't really get along that well.

[Interviewer]

Sure. Which happens all this time.

[Herb Sargent]

Yeah. And. And I think in over the years, I've gotten probably three dozen letters of private equity. Hey, we're looking. We've got a buyer for your company. And I've always just tossed him in the waste can. Right.

[Interviewer]

I get an email every day.

[Herb Sargent]

Yeah. And. Well, you're a software company. That's why it's such a joke. So, you know, I'm sure that. That my grandfather and my dad got these letters over and over and over. And then there was this one, and. And I've got the date in there, but I think it's like October of 1987, that he got a letter from. From Smith Barney, which at the time was a worldwide investment banking company. And. And they were. They were working for a company from Paris, France, Roselle Frere. Roselle Brothers. And they. So my dad paid attention to it, you know, and I don't know what. I don't know if he just had a bad day with Ralph or. Or, you know, a bad day with the subsidiaries, because at the time, and I've written about it fairly extensively in there, he was running all over the state. He had about four companies he was trying to run, and. And he was really micromanaging them, and none of these companies talk together. It's like a bad set of software. You know, you're trying to work in an ERP system and it doesn't work. They never. They don't talk. And there's actually an example in there where in his journal, he was playing referee between two of the companies that were fighting over a $3,000 invoice.

[Interviewer]

Or a better example is the operation side and the equipment side.

[Herb Sargent]

Yeah, right. Yeah. That can be a problem, too. So for whatever reason, dad never explained to me why he took that letter seriously, but I just think he was under enormous pressure, enormous stress. And this seemed like a way. And this company was a big company in Paris, France, the biggest earth mover in France. They had significant operations in Africa as well. In fact, what I learned as I was writing this is at one point in time, their revenues are developed 60% in. In Africa. And so it looked like a really good marriage. The two. Two really good guys, that their company was 100 and something years old. And like, immediately after they signed the papers, like, within two months, there's a letter there from Paul Roselle to my dad that says he had invited him to go to Cameroon with him to visit the. The African operations. And the letter said something like, in light of the crisis in Africa, now Africa is making up less than 20% of their revenues. It just crashed. So this all happened like, right within a month or two after they signed the papers. And in this company now, this French company that we thought was so solid was now literally on pins and needles like one foot in the grave, 100 banana peel in terms of whether it was going to survive.

[Interviewer]

But. But that was. He sergeant was sold to the French company? Officially.

[Herb Sargent]

Yes.

[Interviewer]

And you were at he sergeant?

[Herb Sargent]

Yes.

[Interviewer]

While this was happening.

[Herb Sargent]

Yeah.

[Interviewer]

What was that like from a superintendent's perspective?

[Herb Sargent]

So were you.

[Interviewer]

Were you surprised going back through any of this history or was like, oh, wow, I thought it was this way, but it was actually this way?

[Herb Sargent]

Yeah. So, you know, I. I didn't. My dad never really brought me up to speed on much.

[Interviewer]

Sure.

[Herb Sargent]

And. And I think that was a gift that he gave me. Just like you go out in the field and do your job and don't worry about all this stuff because it's going to be what it's going to be. And, you know, he never said this, but my. My suspicion is he was thinking, you just go learn. You should go learn stuff.

[Interviewer]

Did you have a good relationship with him overall?

[Herb Sargent]

It was good. You know, he. He was. He was a tough guy. He was. I mean, he. I remember that, like the night he died, he pointed to me, he said, look at this guy. Tough love got him where he got him, you know, to my sisters, you know, and so that's. He. He was all about tough love. And. But, you know, we. We talked a lot. We. But there was never any. What I'd call deep relationship.

[Interviewer]

Sure.

[Herb Sargent]

But he kept me at bay as far as knowing that sort of stuff. I just did my job and I was happy to do my job. So it wasn't until I started researching for this book and I had his journals that I. Then I began to learn how acrimonious this whole thing was to the point where, like, he's got a book that says Razelle a three ring binder. And that's all kind of like the pre. Acquisition. The letters that were back and forth, you know, the letters of interest and that sort of stuff. And then he's got another one that's called the Afterbirth. Wow. And. And that's all the. The acrimony back and forth and. And where he just finally said, all right, I'm Out. So he lasted in the company about 16 months. Okay. After the acquisition. And so I was still working there. And I had a job way up at Loring Air Force Base in extreme northern Maine that I, I liked. I liked the area. I like the job. It was, it was the biggest job a company had. Had had at the time. And, and, and we were making money on it, and I, I just liked being there. So I was just kind of like, I'm. I'm going to stick this out, and then maybe when. Maybe I'll leave when this job's over with. I got a visit by a couple. By a Frenchman and a couple Germans. So now our French parent had capitulated to a sale to a German company to save them. And a couple Germans came up to this job and they were really, I mean, like the Fuhrer.

[Interviewer]

Culturally speaking, the French and Germans could not be more different. It's, it's, it's. Europe is incredible because of how close everybody is.

[Herb Sargent]

Right.

[Interviewer]

And like, the EU thing is, even speaking of new things, like, we think Europe gets along, but there is a long, deep history in Europe with very different cultures, very close.

[Herb Sargent]

I mean, it's, there's a lot of wars that took place in Europe for a long time.

[Interviewer]

Yeah. But even like. Yeah. And we know World War I, World War II, because those are the ones we were involved with. But there's hundreds and hundreds and hundreds and hundreds and hundreds of years of history that have built each one of these cultures. And the French, like, the best way I can explain the French is like, they're very laid back, they're very chill. They're like, they're kind of just. They're really not in any rush whatsoever. Yeah, they're just, you know, they're doing their job. But, like, there's not a lot of. There's not a lot of, like, seriousness, urgency. Whereas the Germans could not be more black and white.

[Herb Sargent]

Right.

[Interviewer]

There is. There is not a single rounded edge in the country of Germany.

[Herb Sargent]

Like, it's all which. Which serves them well in some ways. Right. I mean, you look at German engineering, but, but this visit from these, these two Germans, and we had been delayed on that job for about a year. We had to buy some stainless steel pipe for, for the fuel system that we had to put in. And they delayed, like, they had the specs in the bid, and then they said, well, we're not sure we want that specific. And it took them a year, the corps of engineers, it took them a year to figure out what pipe they wanted. And so, and we had a good relationship with the Corps of engineers, and we, you know, kept them on notice that, you know, this is going to cost you some money. And these Germans came in and they were like, I want to see this claim now. I want to. And I was just like, wow, this is. This is different. And, you know, the way it always was, and I reference this in the book, you know, is. Is if I made a deal with somebody, the way Herb Sargent, my grandfather, put it, and the way my dad ended up putting is like, when you shake hands with somebody, you're shaking it with my hand. So, like, be discerning about when you shake someone's hand, but when you shake it, that's a commitment. And we had some commitments, you know, like, we'll wait to see how this thing plays out. And, And. And these guys were like, no, no, we're going to. We're going to hammer this home now. We eventually played it the way we wanted to, but it, for me, as a young guy, 26, 27 years old, I guess at the time, it was kind of like, man, you know, this is the kind of thing like, I. I don't know where I'm going to go in this company now. You know, I suspected I'd advance, but to where my. But if I was going to shake someone's hand, I wanted it to mean something. That's what I've been taught my whole life. And now I could shake someone's hand and a German could show up and say, no, that was not a handshake anymore, and we're going to undo that handshake. And that's when I decided I need to probably start thinking about something different.

[Interviewer]

So think about something different. I mean, there's a lot of options. Why go start a construction company yourself?

[Herb Sargent]

That's a good question.

[Interviewer]

It's a loaded question.

[Herb Sargent]

Honestly, I didn't at the time, 27 years old, I hadn't been proven. And I didn't know that I could go get another job somewhere else, to be honest with you, because had.

[Interviewer]

You always worked at the family company?

[Herb Sargent]

You know, except for a couple years. And When I was 18 to 20, I worked for a different company for a while.

[Interviewer]

But had you thought a lot about the future or were you kind of just.

[Herb Sargent]

No, I was right. I was right in the day. Yeah.

[Interviewer]

Yeah.

[Herb Sargent]

There was no strategy. Sure. No, I was living in the day. You know, it was. I mean, I'd planned my job out, but I didn't plan my life out.

[Interviewer]

Yeah.

[Herb Sargent]

And. And I. The other thing Is, is I just felt like Bangor, Maine didn't have what I would call a serious. Somebody that knew how to move dirt. Not that there's a hell of a lot of dirt being moved in Bangor, but I felt like I could do it better than the people that I saw around town that were doing it.

[Interviewer]

Because that, and that was the merit of the original company was earth moving.

[Herb Sargent]

Yeah.

[Interviewer]

Like he, Sergeant Right. Was known as the premier earth mover in that part of the United States. And then certainly from that.

[Herb Sargent]

Yeah, still, I mean mostly earth moving until, you know, the bridge company came along. But so. And I had grown up and I'd been mentored very well by some really, really good earth movers and, and I felt like I knew how to do that. And that project at Loring Air Force Base really helped me from a management standpoint, like a project management standpoint. It was, you know, the corps of engineers is tough to deal with, can be tough to deal with. So I mean you've got to be on your toes and keeping track of everything. And that served me well. But when I, when I left to start sergeant and Sergeant, my brother is seven years younger than me, Shane. He's, he's still in college so he'd work with me evenings or whatever, you know, putting estimates together. But, but why did I do that? I thought there was an opportunity and I didn't. Honestly, I didn't think I had an opportunity to go get a job with somebody else. And I wasn't sure I wanted to. Yeah.

[Interviewer]

But I think to our original point as well. I think people think starting a business there's this long, long drawn out process. A lot of times or the first step is you go build your business plan and then you execute your business. I don't think I've ever seen it done that way.

[Herb Sargent]

Yeah.

[Interviewer]

Ever. I think it's just like, I don't know, man, I saw something there, I was pissed off about XYZ and I did it.

[Herb Sargent]

I would say, you know, I would. This was more of an intentional thing for me. It was, it was like that visit by the Germans was about halfway through a three year project. And that's when I just started thinking about, you know, I think, I don't think this company is going to be the right fit for my future. And frankly our CEO at the time was, was as bad about like if I went and shook someone's hand, he would unshake it.

[Interviewer]

Sure.

[Herb Sargent]

And I just couldn't, you know, he sent me over to Rome, New York to bid another project Very similar to the one at Loring Air Force Base. And I get there, I think I was 25 at the time. And you know, you're. You're the boss's son. Your name, that. That can be helpful in some ways, but it can also be a detrimental. You know, when, when you show up in a whole new area and your name's Herb Sergeant and then they come company's name and well, they must send this kid over here just to get him the hell out of the office, Whatever. But. So my job was to go find subcontractors to bid this work. It was a new refueling system for this airport in, In Rome, New York, for this Air Force base. And I spent some time over there about a month. And it took me a while to break into these subcontractors. And I had to literally rely on my subcont back in Maine to. To give me. To give word. There was no email at the time. There was no Internet at the time. No cell phones at the time. Maybe cell phones. 88, 89. And so it took me a while to break into these subcontractors to get them to give me a quote and take me seriously. And so finally, and what I told him is, in what we did at Loring Air Force Base is we got three quotes of every trade. So mechanical, building, electrical, the big ones. And we said, we're going to develop a scope and we're going to give you that scope. And if you bid that exact scope, we'll tell you the day of the bid whether you got the job or not. And Pizza Galley was a big, big contractor up there at the time. And they were, they were gross about shopping bids after the fact. So we wanted to get the best bids up front. So we, we got really good bids on mechanical, the building work, and electrical. So I use that same strategy over there. And I got, you know, my subs to call them and say, yeah, they're the real deal. They'll be fair with you. And I remember I was sitting. Now it's bid day, and I'm sitting in what we call the bedroom, the war room in Stillwater. And I've got my laptop out and I've got all these. All these sub quotes me and faxed in. I've got a guy helping me, a project manager. And so our CEO, John sticks his head in and he says, what do you got for subs on that job? Total subs? I said, that's around 10 million. He goes, geez, what do you think we can get for buyout? And I said, I don't even know what that word means. What's buyout? And he said, well, you know, after the bid, we can shop against each other and get a little bit of money off. You know, what do you think, 10%? I said, John, I just spent a month over there telling these guys, that's not the way we're going to do this. Like, I literally spent a month over

[Interviewer]

there talking to these guys and chopping bids for people that don't understand.

[Herb Sargent]

Yeah. So after the bid, you get these subcontractor quotes. And after the bid, you basically call the guy that's low and say, you're not low. You know, can you take a couple hundred thousand dollars cut? Or, you know, you just say, you know, you're not low to all three or four. Whatever bid you get, you're not low. It's just this. To me, it's just dishonesty. And it's. It's never the way we've done that business.

[Interviewer]

Yeah.

[Herb Sargent]

And we never did it before. And he said, herb, that's the way the world is now, and we're going to have to do that. And I said, john, we always got by doing the right thing, saying, you know, following up on what we said we were going to do, and we won by efficiency in the field, not by beating people up. And he said, well, that's the way we're going to do it. And I said, I'm not going to do it. Bill is right here. He knows the bid. Here's the spreadsheet. I'll leave my laptop right here, and you guys can finish this job. I'm not going to do that. Because what he wanted me to do is go into the bid taking, let's say, 5% off the total of the subs. So take a half million dollars off a ten million dollar sub number. Sure. And then we. Then we have to go beat them up.

[Interviewer]

Yeah.

[Herb Sargent]

And I just wouldn't do it to

[Interviewer]

be more competitive and win.

[Herb Sargent]

Right. To win the bid, and I wouldn't do it. And so that's when I knew at that point in time, like, I just wrote my epitaph with this guy. Right. So that's when I knew that I had to make the Germans made me think about a different way. But this guy was like, yeah, I gotta go.

[Interviewer]

Okay.

[Herb Sargent]

And so. So I started. I put. Actually put together, you know, a business plan. It was. If I. It's not something you'd see in the halls of higher learning, I can tell you that clearly. But I did Put together a business plan, if, if nothing else, just something. And, you know, I bounced it off my dad, and he was kind of like, you know, poke holes in it. But, you know, what the real business ended up looking like when it started was nothing like what was planned.

[Interviewer]

What did your dad think about this?

[Herb Sargent]

He was, he was in favor of it. You know, he, he, I think he knew that, that me staying in that outfit, the way it was being run then, was going to be a challenge for me.

[Interviewer]

Was that, Was him being in favor of it important to you, or was it just, you know, a nice to have, but you were doing it anyway?

[Herb Sargent]

No, I, I'd say it was important to me. I mean, frankly, I, I. Everything he ever said or thought was important to me. Probably more so than it should have been, but, you know, it was always important to me. And he'd survived a lot of fires, right. And so, so, you know, whether, whether it was, you know, just advice to, you know, that, like, I don't have the dog in the fight, or it might have been more vicarious, you know, like, I want to have an impact. And I think a lot of what dad did in the end, you know, not in the end of his life, but in the end, now that I think about it, it was more like what he wanted to see. And he, you know, manipulation, I guess I'd call it, you know.

[Interviewer]

Did you talk to Herb about it?

[Herb Sargent]

Yeah. Yeah, he knew. He. I actually asked him to be on my board, which never met, but he was, you know, I needed a strong director that I could say. You know, the director's Herbert E. Sargent.

[Interviewer]

Right.

[Herb Sargent]

So he agreed to that. And, you know, manipulation, yeah, that was. That was manipulation. But he was very supportive, and I spent a lot of time with him in those years going around to jobs. You know, I'd go pick him up, we'd spend the day together. He was, let's say, 88 or so at that time.

[Interviewer]

That must have been the coolest.

[Herb Sargent]

Yeah, it was. It was, it was really cool. And I can remember power screen was a new thing at the time. You know, your screen with a belt. And, and he asked me, he said, you. What do you think about that machine? I was looking at it, and it wasn't running. We hadn't seen. Hadn't seen it run. And, and my uncle was the dealer, and he said, you know, if I'd had a machine like that when I was younger, I might have turned into something. So I used that in this book a few different times. You probably picked up and he, and he said, you know, if you thought that would be helpful to have that machine, I think it was 80,000 bucks. He said if you thought that would be helpful to have that machine, I'd buy it and you can pay me back when you can. And you know that, that was just, he, he wanted to see my brother and me do well and he wanted, I think he liked the fact that there was a sergeant name out there that was not owned by Europeans. I don't, he went along with that sale, but I'm not sure he ever liked it.

[Interviewer]

Sure. So the company then becomes sergeant and Sergeant the new company.

[Herb Sargent]

Yes.

[Interviewer]

For you and your brother.

[Herb Sargent]

Yes. Were you guys 50, 50 odd construct at the beginning. So he, he was minority and I was majority. But we had my sisters involved in it too, ownership wise.

[Interviewer]

Okay. And, but your dad. Zero.

[Herb Sargent]

No owners. He had a non compete and so he had no ownership. And, and what happened with me is I got this first Walmart job. I talk about it in here.

[Interviewer]

I, I thought that was the funniest thing. Your first job was a Walmart?

[Herb Sargent]

Yeah, you know, bid a dozen jobs for three months and you know like every job I'd be like these are two or three hundred thousand dollar jobs and there'd be 16 bidders on them and I'd be like 14 out of 16 on every.

[Interviewer]

What year was this?

[Herb Sargent]

92.

[Interviewer]

And so this was, the economy was not trash. Yeah, it was dot com. The whole thing had just.

[Herb Sargent]

No, no, that was later dot com. This is before the Internet was even.

[Interviewer]

Okay.

[Herb Sargent]

This is, you know, before the Internet, I guess. Um, yeah. So you know, I'd bid a job like a, let's say a transfer, municipal transfer station for $200,000 and I'd be 14 out of 16 or something like that. And the economy was so bad, everybody was so starved for work. And I'm convinced, you know, that most of the contractors were giving their equipment away or at least at a deep discount and just to keep their people busy. And of course I didn't have that luxury. I had, you know, I was renting equipment. That was my plan. And you know, you can't give that away.

[Interviewer]

Yeah. Because if you, if you have equipment that's paid for, it's one thing, you can be a little bit more flexible on equipment rates. Yeah.

[Herb Sargent]

And that's, you know, one, one thing my dad mentioned one time about a competitor in New Hampshire that lasted a lot longer than everybody thought he would and he said, well you can take it out, you can take it out of the iron for a lot of years. You know, you can just keep depressing your equipment rates and, and keep running the iron until the undercarriages fall off. Right? Yeah.

[Interviewer]

And then it's not a long term.

[Herb Sargent]

No, no, no.

[Interviewer]

It's a strategy.

[Herb Sargent]

It's a strategy and I think there was a lot of that going on at the time and I had to rent equipment so I, you know, I just couldn't discount it. And then this Walmart came up and this is before Walmarts were on every corner, especially in Maine. And it was, I kind of sat back and I said, you know, I may be able to compete on this because I know the only other bidder is going to be HE Sargent. And you know, I, I learned to estimate at HE sergeant. I know the equipment rates, I know their markup strategy, I know everything about the way they bid it. Now, whether they decide to get more aggressive on this particular job or not, that's, I could never know. But I knew their equipment rates and I had my equipment rates and I had my labor rates and, and I said, you know, I, I don't have a lot of advantage over them except I have zero overhead. Like I was going to be the superintendent on the job.

[Interviewer]

Yeah. No office, you know, at the time

[Herb Sargent]

that I had nobody in the office. It was my brother and me and, and so we bid the job and, and got the job and then it was time to go to work. And, and you don't, I mean if you can start in this business slow, like if you can do a hundred thousand dollar job and you can begin to accumulate the stuff you need to, to build jobs, that's one thing. But all of a sudden this was a 3 million dollar job in 1992. Crazy. And you know, I didn't have like I had a shovel at the house.

[Interviewer]

But, but, but before. Tell them how you got the job though. Like.

[Herb Sargent]

Oh, the interview.

[Interviewer]

Yeah, yeah. Why would they give it to you if you'd never done a job before?

[Herb Sargent]

Yeah, that was, and some kid, yeah, some kid. 28 years old.

[Interviewer]

Because you were, you're probably looking a lot younger at this point.

[Herb Sargent]

Point.

[Interviewer]

You might have even had hair.

[Herb Sargent]

Yeah, I had a good shock of good dark brown hair.

[Interviewer]

So you weren't exactly a seasoned builder.

[Herb Sargent]

No, you know, I, I, so I went down, they, they called me up and they on the phone, he said you're a parent, little bitter and we want to talk to you. So I went down and met with the general contractor and I walked in and we sat down and talked a little bit about the work. And he said, okay, so you know, there's you, you bid a very bare scope. Like I want to keep my price down. So I didn't bid like I bid just the dirt work and maybe, maybe the paving. I can get paving and curbing, but no landscaping, no lighting, no, you know, no off site lighting or, or anything like that. And he said, we're going to need you to carry these subs, you know, if we can come to an agreement with no markup. And I said, Larry, come on, you know, that's not fair. You can't ask a guy to start out in business taking 600, $700,000 worth of subs with no markup.

[Interviewer]

Sure.

[Herb Sargent]

And he said, well, let's think about that. But before we get any further, how much equipment do you have? And I said well, I don't have any equipment, but I've got a line, you know, with, with Milton Cat. You know, I've got it all, everything's lined up. And he said okay, how many people do you have? I said, well, right now it's my brother and me, but you know, I'm, I'm confident. I've got about a half a dozen people lined up and I'm confident the way the economy is, I can fill a crew in no time. And. And that ended up being true. And he said, so you got no equipment and you got no people. Why would I hire you to build this job? It's a critical schedule, you know, the

[Interviewer]

big customer, demanding customer.

[Herb Sargent]

And. And I said, because if you hire me to do this job, you won't have to lay awake at night worrying about it because that'll be my job. I will take that over for you. You, you can sleep at night and I'll stay awake. And he said, okay, well what about the subcontractors? I said let me think about that. So I walked out and in the foyer, was he Sargent's business development guy? So he was coming in next. And I knew the guy shook his hand, hey Ken, how's it going? And I turned around and walked back in Larry's office and I said, hand me a blank piece of paper. And he hands me a blank piece of paper and I wrote letter of intent. And I put the price that he had said he would pay. And I said to Sergeant Sergeant, yada yada. And I said, sign that. And he signed it. And I turned around and walked out and I said, have a good day, Ken. And I kept going. And Ken didn't have a job. He didn't have any negotiation. So there you go. That was the job, you know, to start with.

[Interviewer]

And so you start to build work on your own. The. You said in the book that obviously the previous relationships with he Sergeant it became icy because you were now taking work from them.

[Herb Sargent]

Oh yeah. It was rather immediate. Yeah.

[Interviewer]

So you had no friends?

[Herb Sargent]

No friends back there? I had people that I was friendly with still back at the company, but they weren't allowed to talk to me.

[Interviewer]

Yeah, yeah. Your picture was on the wall.

[Herb Sargent]

Right. With darts in it. But about a month into getting started on this job, I got a letter from John, the CEO at he Sergeant, outlining all the ways that I was affecting their business. And you know, that they had heard people had extended credit to me based on the idea they thought I was related to them. And which, which was, you know, but, but he ended with, you know, if you don't cease and desist using the Sergeant name, we're going to be forced to, to do something. Yeah. I can't remember exactly how it was worded. For some reason I don't have that letter still and I wish I did.

[Interviewer]

Yeah, that would be good. Yeah.

[Herb Sargent]

And, and I got with my attorney and I, you know, my, of course my first reaction was to be really indignant and some of that showed up in the final draft. And you know, we went through the reasons that they couldn't sue me. Right. And I ended it with, you know, you guys have to do what you have to do. But in the end I could use all the free publicity I can get. So, you know, so fire away. And that was the last I heard

[Interviewer]

and I have nothing. So what are you going to take?

[Herb Sargent]

Right. I mean, when I Left, I had $30,000 in a 401k that I cashed in. You know, like I tell everybody not to do that, but I did it. That I cashed in and paid the, paid the penalty on. But it was, it was beginning to get, you know, after three months. 30,000 bucks after you pay the taxes and penalties isn't much to live on when you've got a, you know, a one year old and one year old and you're trying to figure out how you're gonna make your house payments and car payments and.

[Interviewer]

Yeah, so your, your dad didn't fork over money to make.

[Herb Sargent]

No. So here's, you asked me about ownership and here's where that kind of got confusing. What happened with this contractor on that Walmart job is their owner went in for, for open heart surgery, kind of like standard stuff, and he ended up dying. And suddenly their bonding company, right. The owner dies the bond. Their bonding company's got some questions, concerns, and they came in with a mandate that that company get a bond from me, which is probably the smart move. Right. I'm just a 28 year old kid with no money and no people and no equipment. And so I had to get a bond. And there's no way I could have gotten a bond with what I had because there's nothing.

[Interviewer]

Yeah, nothing to your.

[Herb Sargent]

And so I, I went to dad and he, he, my dad, he couldn't really get involved, but he said, here's what I'll do. I will, I will park some assets at the bank that you can borrow against. In order for me to do that, you have to give each of your sisters 10% of the company.

[Interviewer]

Interesting.

[Herb Sargent]

And your brother 10 of the company. So I had 50. I have five siblings. So each of them had 10%.

[Interviewer]

Interesting. Okay.

[Herb Sargent]

Remember I said something about manipulation?

[Interviewer]

Huh. Wow.

[Herb Sargent]

And for me, you know, I, I didn't know what the hell equity meant.

[Interviewer]

Sure. And, and, and, and when you're desperate.

[Herb Sargent]

Yeah. I mean, I'm out of money.

[Interviewer]

Yeah.

[Herb Sargent]

I've got a job and this is a way for me to begin to pull a paycheck. And so it was, it was just like, you know, I didn't know what I was giving up. And then, you know, I said, okay, but when, when do we buy them out? He's, well, if we get it. So Everybody's worth about 50 grand and they'll get paid off. And I'm thinking, oh, so that's 250, $300,000. 250 grand. And then it happened in the middle of like the third year in that the value got so that they were, it exceeded $50,000. But I wasn't focused on it.

[Interviewer]

Yeah.

[Herb Sargent]

And all of a sudden at the end of the year, I was like, whoa, you know, now they're all worth $75,000.

[Interviewer]

Yeah.

[Herb Sargent]

And I said to dad, you know, it's time for me to give them their fifty thousand dollar check. And he said, it's not fifty thousand anymore, it's seventy five thousand. And that's what, that's when I learned what equity meant.

[Interviewer]

And you're a growing business. So you don't have a pile of cash.

[Herb Sargent]

Yeah, I had no cash. No cash. And you know, and now I'm writing a check for. Well, Shane stayed in, so it was $300,000 I had, I had to pay off my sisters. And I remember one of my sisters saying that was really nice of dad, and I just, you know, just. Shut up. Her. Shut up. Like you've been the one out there slaving away in the heat and the cold and. And staying awake at night that built this $50,000. But, you know, our relationship is really good still. And it's one thing about my dad is I don't think he understood how that could have. Could have disrupted those relationships.

[Interviewer]

Oh, it could go terribly wrong.

[Herb Sargent]

Yeah.

[Interviewer]

Yeah.

[Herb Sargent]

And. Yeah. But, you know, it all worked out well, and we all love each other, and it's great. My brother. My brother stayed in for 10 years, and then he decided he wanted to go on his own, so I redeemed his shares and. And ended up being. And I guess my dad bought a few shares from my sister's. Well, mostly because I didn't have all the funds to pay him off. So he ended up buying a few of those shares from them. He ended up with, like, 12% of the company.

[Interviewer]

Okay.

[Herb Sargent]

So when we bought Ichi Sargent back, now we're moving ahead 13 years. Yeah. You're skipping ahead 2005. He still owned a part of it, so.

[Interviewer]

Spoiler alert. Did you make good money on that first job?

[Herb Sargent]

My recollection is on three and a half million dollars in sales. We made like $240,000. That's not bad. After, you know, after I took a paycheck, too.

[Interviewer]

Yeah.

[Herb Sargent]

So not terrible. Yeah. But, you know, you got retainage tied up. There was a change order that, that me and the project manager agreed on that. Then Larry, the owner said, I'm not going to pay you that change order. I see. And that was worth about 80,000 bucks of that 230.

[Interviewer]

These are good lessons.

[Herb Sargent]

Good lessons. And. And I said, no, you're going to pay me for that. You know, this is like, I've already spent the money, so you got to pay me. And. And so we. We put a lien on the project, which stopped everybody's money. And so now I've got. I've made $230,000. I've got to pay taxes on $230,000, but I've got that much in retainage tied up, plus the $80,000. And I got spring of the year in 1993. Zero. Cash.

[Interviewer]

Yeah.

[Herb Sargent]

You know, and I've got this line of credit that, that I borrowed against some of Dad's assets. And it was. It was trying times. You know, it's. I can so relate with all these people that I talk to in these peer groups and people you see on LinkedIn. And, and people I've talked to in these leadership conversations I've had. I can still relate to not having money, to not having the right people, you know, in the right places, to not. Yeah, I can so relate to that. And, you know, it's, I think it's easy to, you know, we celebrate 100 years this year, and it's easy to think that, well, there's never been an issue. There's never been any. But there's been periods in, in this company in fairly recent years, you know, that were very, very lean.

[Interviewer]

Is it pretty motivating, too, when you have a toddler and family at home?

[Herb Sargent]

It, it makes you think differently, you know, And I hate that we tend to think and say, we're doing this. I'm out here working this hard for you.

[Interviewer]

Yeah, yeah, yeah, yeah.

[Herb Sargent]

I hate that.

[Interviewer]

Why?

[Herb Sargent]

I, Because I think it transfers some responsibility for what we're doing. In other words, we're putting the responsibility on the rest of the family. For what? I'm out, you know, I'm out here working 14 hours a day or whatever. And I, I don't think I ever said that to my wife at the time, but I, I, I'm sure I felt it at times. But, you know, one, one skill I developed quite early was no matter how bad the day went, I didn't want to talk about it at home. And so I would spend whatever the commute home was, depending on where it was. It might be 15 minutes or might be an hour and 15 minutes just thinking about the people that had poured into me and the gratitude I had around that. And it just helped me reshape my thought process away from the problems that happened that day into. I can be in a headspace where when I get home, you know, no matter what time it is, it might be seven, eight o' clock at night, but I can be in a headspace there where if my daughter says to me, I want a horsey ride, like she's going to get a horsey ride.

[Interviewer]

Sure.

[Herb Sargent]

And that was one of the things I said to myself, is it doesn't matter how tired I am, how late it is. If I get home and they want to play, we're playing.

[Interviewer]

Something I heard recently was it was in a military context, which is probably one of the more extreme examples of this, maybe professional athletics, some other things. But you, you would go from, they'd go from a mission and then they'd go back to their families and wives. And, and he said, this guy talking, one of the older guys was like, they don't have to conform to you, you have to conform to them. And so, and no matter what you just did, you're going back to their world. You can't make them come to your world. It doesn't work that way.

[Herb Sargent]

It's not easy.

[Interviewer]

And. Well, and it's, it's a lot easier said than done.

[Herb Sargent]

You're right.

[Interviewer]

But, man, I've been thinking about that a lot because, because it's like, I mean, I obviously haven't done very well in the relationship department yet, but, but even just.

[Herb Sargent]

I found the right one yet.

[Interviewer]

Yeah, no, I'm not, I don't, I don't stress about it most, most days, but I. Even with the business though, for example, like, I'll go, I fly to Africa tomorrow. And it's, I was just, I was in India a week ago and it's, it's, it's crazy, crazy just how different it is. And, and it's, it's such, I mean, talking about new stuff within a 24 hour period, you can go from Mumbai to Chicago, just mind bending, I bet. But then when I come back here, no one cares. Everybody's. And they don't. It's not that they don't care. It's. They have their, they're running the company.

[Herb Sargent]

Got their own thing.

[Interviewer]

Yeah. They're building the business, they're dealing with customers, they're solving problems here. And so I can't come back here as a leader and be like, well, you know, I'm Mr. World Traveler. Give me a moment. Yeah, they don't care. And they can't even really understand it because it's, it's so far away. But like, it's really selfish if I try to make everybody bend to me.

[Herb Sargent]

Yeah.

[Interviewer]

And it doesn't work.

[Herb Sargent]

You know, I was on a call. Well, I actually had lunch with Jason Richmond. Not this last Con Expo, but the one before.

[Interviewer]

Oh, good.

[Herb Sargent]

And I reached out to him and I had only met him in a video call, and so we had lunch and we were talking about family. And I can't remember if I was talking about my dad or my son or whatever it was, but he said, you know, a piece of advice I got not too long ago was if you can open a conversation with what you admire about somebody, you know, not being contrived but, you know, real and, and not being gross about it, but. And that was a really powerful way to think about it, you know, and so, you know, my kids and I are really different, but I really admire them for, for the things that they do and the way they believe. And. And even though I don't necessarily agree with a lot of the thoughts, I admire them for their. For their principles that they have. But I was on a call back in January with a guy, a construction leader, and he said, you know, I'm just no fun at home. And I said, say more about that. He said, I just get home and I crack a beer and I go sit on the front porch and watch the sprinkler go around. And I think about everything went wrong today. And I said, do you admire your wife? He said, oh, yeah. And I said, what do you admire about her? And it took him about 10 seconds to come up with something because he's never thought of it, right? And when he finally did, what do you admire about her? And he said, well, she doesn't take my shit. What would it be like for you to go home tonight and, you know, think about what you admire about her and actually tell her that? He goes, oh, that would be kind of blocky at first, wouldn't it? And I said, well, yeah, but, you know, you guys have had a lot of firsts together. You've got a couple kids, you've got, you know, so you can probably get by this one. And he texted me the next morning. He said, I can't believe how well that worked. They just went and, you know, took her by surprise because, like. Like, where's Joe? And what'd you do with him?

[Interviewer]

You sure?

[Herb Sargent]

And I think that's just a way that we can approach life, not just with family, but other people, too. You know, I mean, we don't have to go around pouring honey all over everybody, Right? That's not the point. But. And if you went in every night and you came home with a different thing that you admire about your wife or your kids, it would seem like bringing flowers every single night.

[Interviewer]

Right?

[Herb Sargent]

Like, okay, now it's not real, but when you can be real about it, I think that's important.

[Interviewer]

Did you. Did you. Did you journal through all this?

[Herb Sargent]

I. I didn't journal a lot of my time. What. What I did is I. I've kept my to do lists. Ah. So I've got them bound up from the 90s all the way through.

[Interviewer]

That's interesting.

[Herb Sargent]

And it's a different way. It's like. Because I can see what I did, you know, for the most part, if I can remember the context around it. But I dug out one the other day, and about a year ago, I guess, and it was to. To a guy that Approached me on a job and he says, I need to come to work for you. This is the second year in business. He said, I'm told I need to come to work for you. And I said, okay. So I got my pad out and I wrote out an offer. It was salary, $480 a week, no health insurance, no vacation, you know, truck pay of 125 bucks a week or something like that. And. And I handed it to him. I said, how's that look? And he said, yeah, that's good. So I took it back and put him on the payroll. But I found it in, in my notes not too long ago. And he still works for us now, 30 something years later as a regional manager. And, and I, I made a photocopy of it and I wrote on it, why the hell did you agree with this? And I put it on his desk and, and it was just. I have a lot of that stuff around. But back in 2013, 14 or so, I started. I actually started keeping a journal. And then Covid, like it did with everything else, disrupted that thing in me and I stopped. And I haven't started back up that.

[Interviewer]

I would say that's one of the best habits I've developed that a lot of people just don't talk about. You know, exercise, reading, not drinking, eating. Well, like, those are pretty common. But writing every day has just like one. I plan my day the night before.

[Herb Sargent]

Yeah.

[Interviewer]

And so I have to do nothing, but I open up my notebook and that's what I have to do today. Yeah, that's it. I just. There's my list at just one day at a time. It's not what I have to do tomorrow.

[Herb Sargent]

Yeah.

[Interviewer]

It's not what I didn't get to. It's just, here's what I need to do. And then in the evening before I plan tomorrow, I'll write about the day, how it went. And it's such a nice mechanism for even five minutes of reflection.

[Herb Sargent]

Yeah.

[Interviewer]

Like, I think people think reflection needs to be this long, drawn out thing. But it. Yeah, I write five minutes a day, 10 minutes a day, fill a page. And sometimes it's total nonsense. Like, I had a great chicken sandwich today. And then sometimes it's like I had the shittiest conversation I've had in a long time. And I feel bad about it. And I don't even know why I feel bad about it. It's just kind of like a ramble. But it's. It's really nice to at least have some trigger every day to Just think

[Herb Sargent]

about what's going on. I did it well for seven years. And, you know, I go back and look at it on occasion because, you know, we got in a little bit of a legal battle with a company we owned and sold. So with the owner of that company, got a little bit of a legal battle. So I literally had to go through all my. All my journals and tease apart what happened and when and all that business.

[Interviewer]

Sure.

[Herb Sargent]

But it is also good to just go back and read it sometimes.

[Interviewer]

That's something I've never done. I have, like, boxes of these journals now, but. And I would love to one day. But it is also funny. I've done some things in other ways, but it's funny how your memory can be completely different at the same time. And I'm not even that old.

[Herb Sargent]

Yeah.

[Interviewer]

Like six years ago, something that I have the story in my head, here's exactly how it went. And then I go back and find the receipts, so to speak, and it's like, it could be more different perspectives change.

[Herb Sargent]

I mean, I used it in this book that James Clear says, you know, the events of your past are fixed, but the meaning you assign to them is up to you. So assign it. Assign a more useful meaning to that. Those events in the past. And, you know, you've got something you can work with. It doesn't always have to be like, boy, that sucked. You know, that was the meaning I took away from. That is. So your. Your perspective changes. I mean, I. I see it in you. Your perspectives have changed a lot over the years, and mine have too. I mean, in the last five to seven years, I'd say I've grown more, you know, as I came into my 60s than I did in the previous 40 years.

[Interviewer]

Yeah. I. And that, like, to me, getting older is the coolest thing in the world, I think.

[Herb Sargent]

To a point.

[Interviewer]

To a point.

[Herb Sargent]

But then when you have to die, that's not as cool anymore.

[Interviewer]

Well, yeah, but. But that also creates life. That creates the whole meaning to. Yeah. To what we're doing. Yeah. I've loved it because it's like every year it's like, wow, I'm. I am getting better.

[Herb Sargent]

So if you went back and picked something from like 2020. I don't know if you were journaling then, but yeah. You know, so if. Let's say you did for.

[Interviewer]

For many years now.

[Herb Sargent]

Let's say you went and picked. Pick something up when you rolled over your bobcat, whatever it was, you know,

[Interviewer]

that was one of the.

[Herb Sargent]

Picked up that journal now and read For a month, either side of that. And things that you were mired in at that time or the things you thought were going to be the wind over your wings, you know, your Bernoulli effect that you thought were going to be that maybe some turned out to be and some didn't. You know, to me, that's again, like, okay, I can learn to trust my instincts a little bit better when I go back and see whether what I thought was going to help actually helped or if it actually hurt, you know, and some of those things, I think it's. I mean, I don't pick them up a lot, but I do go back and look.

[Interviewer]

I feel like, though, I've run

[Herb Sargent]

and

[Interviewer]

we'll take a break here in a moment and then get back to the story. But I feel like I've. When I've run aground, it's when I've gotten away from my instincts.

[Herb Sargent]

Yeah.

[Interviewer]

And when I've stopped listening or when I've got too caught up in my bullshit. And me as an individual and when I get thinking I'm good. I think when I get away from that, like, kid within me, it's when. That's when things go wrong.

[Herb Sargent]

Yeah. I mean, there's. There's a certain amount of naivety. That's the kid within you. Right. But it's also. That's also kind of the innocence that you. You work with and you carry forward and, and you hope, you know, when you have that innocence within you, you hope that that's what comes through, you know, authenticity and. And that sort of thing. You know, I was. I was involved in a conversation last. About Christmas time, I guess. We had a young couple stand at our house with us, and my wife had already gone to bed. I'm sitting here talking to this young couple, just been married a month, and the wife said, you know, I'm not really. I don't really like. I try to avoid confrontation. I said, yeah, I'll be honest. I think I do too. I don't like. I don't run headlong into it.

[Interviewer]

I do too. Yeah.

[Herb Sargent]

And. And the husband says, I like talking to people like you guys because I can win. And that was about the time I turned to head upstairs and I stopped and I turned. I said, define winning.

[Interviewer]

Yeah.

[Herb Sargent]

Because my feeling is it's a hell of a lot better to get understanding in a conversation or an argument than it is to win. Like, when you win, the nature of winning is somebody loses. And that's a zero sum game. So if you win, then the person you're talking to loses somehow. Yeah. Well.

[Interviewer]

And I, I think that works against the entire construction industry.

[Herb Sargent]

Yeah.

[Interviewer]

This. Just because we're all insatiable. Insatiable appetite to, to win, prove ourselves.

[Herb Sargent]

Right.

[Interviewer]

To prove. Yeah. Which is like, you do need that. But then it does. It's corrosive at the same time. And like with my dad not talking to me for now, over four years, I've, like, one of the key lessons I've learned, and I talk about this now is. And, and, and we, we learned this as a business last year as well. It's like reality is what it is. It doesn't, it doesn't matter how you position things. It doesn't matter how you feel, what words you use. It just is what it is. And so I think if you're, if you're so fixated on winning, you're not fixated on like really finding the truth and whatever. Is there reality? Yeah. And. And you can't make any kind of progress without understanding what the reality is in the first place. So it's just completely flawed. And yet even though I know that I still get caught up in that all the time, but sometimes I'll catch myself. Now it's like, what am I doing here? I think about the meme. It's like the husband on the couch. Like, I won the argument.

[Herb Sargent]

Yeah, right. That's what I'm saying. You know, I, I can't say that I've never wanted to win arguments. I mean, sometimes you need to win. A conversation in a business sense, prevail may be a better word. I don't know. But, but to me, if, if understanding is found in that conversation, instead of looking to win, I was in a conversation with a leader probably six, seven years ago, and we're in the truck. And I said, we need to, I think we need to moderate our revenues next year. And he said, you're going to be pissed at me. And I said, no, I'm not going to be. We're having a conversation. He said, all right, fuck it, I'm pissed at you then. And like, what. Where do we get. Where to? How do we. Nobody wins in that conversation.

[Interviewer]

Yeah. At what point does the conversation begin about acquiring he Sargent?

[Herb Sargent]

Yeah. So I mentioned earlier that Tim Fohlster and George Thomas joined me in 2000. And like, it wasn't even a thought until that happened. And when those two guys joined, we were doing about 10 million a year and doing okay, you know, making 5, 6, 7%. And when they came, we doubled. I think we did maybe 50% more the next year and then doubled within a couple years and profits were better. And we then we started seeing he sergeant they were going through their own parent company problems and, and they had a building division, what was previously my dad's bridge and building division got separate company, got sucked into he sergeant because that was bought as part of that transaction. And then their parent company, they lost money at the building business in those years and the parent company said no more buildings for you, but you can't, you have to maintain your top line revenue. So they were doing about 100 in dirt and 100 in buildings.

[Interviewer]

Oof.

[Herb Sargent]

In Maine is just not that big a market. I call it the economic cul de sac. It's where money goes to turn around and leave.

[Interviewer]

Sure.

[Herb Sargent]

And so you know, this was like false capacity in the market. I think I call it that in the book that all of a sudden, you know, these guys are forced to do $200 million in dirt in a market. They've only been, they've been working hard to get 100 million in. And they, it was just like they got to take every job and suddenly after two or three years of decent, decent years, 2000, 1, 2, 3, they started hitting the market hard and they were like 30% low on every single job.

[Interviewer]

Did that hurt you guys?

[Herb Sargent]

Yeah, it was starting to. I mean we were getting, we were still maintaining our work pretty well, but it was starting and we could see it like this is going to hurt if this keeps up. This is going to hurt. And, and we heard that they may want to get out of New England altogether. The parent company was now FRUCON over in St. Louis. And so we checked through FMI, the construction consulting company to see if they'd check with them and see if they were interested in selling he sergeant and they said they were not. Now, you know, at the time we're doing about 20 million. They're trying to do 200 and but they, I don't think they ever did reach the 200. I think they were in about the 120, 140 range. But then Fruiton had a project, I think it was on the Ohio river, the Maumee river bridge project. They left like $50 million on the table on and yeah, woof. And then they had an incident where they had four photographs. And that's when their German parent Bill Fingerberger basically said okay, we're getting 100 out of the silver civil business in America. And so we, you know, this the way they were undercutting the market, we Felt like what the, what the strategy was is we'll, we'll run these guys out of business, then we'll own the market and we can get our numbers back up. But then that event happened over there and that was in 2004, I think. And, and so we had checked in with him in 2003, late 2003, and then that happened in 2004. And we heard, we had heard about that and we had heard that they were told to get out of the civil business. So we checked again with them and, and so that was in now 2005 that we started having real serious conversations.

[Interviewer]

But even, even having conversations with them though was crazy. You're doing 10ish million a year.

[Herb Sargent]

2020.

[Interviewer]

They're doing a hundred ish, 200 with building, but yeah, well, north of a hundred million a year. So you're buying a company five to ten times.

[Herb Sargent]

About six times.

[Interviewer]

About six times your own, which like, were there any conversations like, I don't know if this really makes sense.

[Herb Sargent]

So we were, we basically were evaluating two risks, the risks of not doing it. And if they kept doing what they were doing, we were probably going to have to cut our company in half and lay off half our team. Right. And we were really happy with our team. We felt really good about our team. Like, I guess in any company you could go easily find five people of, you know, 100 employees. You could find, find people that you could say, okay, we can get by without those guys. But we were really happy with our team. We had a great crew and we just didn't want to deal with that. And then so the other risk was buying them. And, and if we did buy them, there was a lot of pluses, I felt like to it. We were tracking our gross profit per labor dollar and with the original information Fruiton gave us, their gross profit per labor dollar was way lower than ours. So we reasoned that if we could even close the gap halfway that that almost alone would begin to pay the company off, pay off the acquisition. And that's really the sales point that we took to the bank and the bonding company is, look, you know, we know these people like Tim and George. George was the CFO there. Tim was the VP Operations there before he left. And you know, I wasn't that I was a superintendent, but I mean, I knew most of the people there. Tim and George knew most of the people there. They knew us. We felt like there would be a, we felt like we'd be received pretty well. Like, so we, we went after it, you know, and we had, I think after two meetings with. With Frukon's president, we had the framework of a deal worked out and. And then it was really just due diligence after that. So that was, let's say the first meeting was in March, the second meeting was in May, and then they announced that we were going to buy them in June. And then we closed in July 21st.

[Interviewer]

That's pretty quick. Yeah, for a deal that size.

[Herb Sargent]

But it was, you know, one thing I would say is Frucon wanted out.

[Interviewer]

Okay.

[Herb Sargent]

And they made the deal really easy to evaluate. And so we, you know, we said, we'll buy the assets at book price and then, you know, you've got working capital out there employed on jobs and, well, we need a discount on that because there's risk in those jobs and then there's some inventory we'll buy at 70% of market value. And that was. That was really it.

[Interviewer]

So in the. And the purchase was financed by the bank?

[Herb Sargent]

Yes.

[Interviewer]

Okay.

[Herb Sargent]

Yeah.

[Interviewer]

So the risk, the biggest risk was that note that you'd have to service.

[Herb Sargent]

Right.

[Interviewer]

For what. What was the payment term?

[Herb Sargent]

10 years. 10 years. So. So we had two components of financing, basically. One was, you know, Fruitcon. He sergeant had money deployed on jobs, and then we would have to pay that back as that money came in. So that was one component.

[Interviewer]

Yeah.

[Herb Sargent]

And then the other component was the bank financing, which was mostly for the rolling stock and assets. Yeah.

[Interviewer]

Okay.

[Herb Sargent]

And so, I mean, it went pretty smooth. And. And, you know, Tim had some really good insights. He said, you know, there's two things construction workers want is good equipment and a backlog. Like, they want to know they got a job coming up. And. And we, you know, we kind of reasoned that we've only got one chance to get this right. I mean. Right. If. If this doesn't go right, then I'm cleaned out because I. My house was on the line, my wife's car was on the line. The little place at the lake we bought at the time, that was on the. Everything I owned was on the line.

[Interviewer]

Yeah. Like the whole life that you had chipped away at.

[Herb Sargent]

Right.

[Interviewer]

And built for your family for close to 15 years. 15 years.

[Herb Sargent]

That was like.

[Interviewer]

To put it on.

[Herb Sargent]

Yeah. I mean, if you could just take like little Monopoly hotels and slide them across the table, and that's what it was. So. So we reasoned we had one. One chance to get it right. And visibility was like the. Probably the key component for us. Like, they had to see us, the new team had to see us, and and we were really well received. I was frankly surprised at how well received we were because there had been so many changes. And I, in my mind, I reasoned that, you know, they're probably just saying, oh, shoot, another change, you know, but, but what I, what we underestimated was that it was local ownership now, like the people, the shop could drive up to the office and sit down across from me and say, we need to buy 3D6 and we can make that decision right here. It doesn't have to be put into some spiral, round, spiral bound notebook and shipped off to Germany to get approved by the, the Billfinger board.

[Interviewer]

Well, there's like, and that. And like your name probably carried weight as well.

[Herb Sargent]

It's like I'm, I'm sure it did, you know, but I, I mean, I was still an unknown to a lot of the people there personally. Like, I, I knew some of the people that I'd worked directly with over the years, and some of those guys were still there, guys and girls, but there was a lot that had never met me.

[Interviewer]

So how long were you not there?

[Herb Sargent]

13 years.

[Interviewer]

13 years. That's pretty incredible. And even, I mean, yeah, we didn't cover much within that 13 years to get there, but it's a pretty, It's a pretty remarkable story. What was the plan to make it more profitable?

[Herb Sargent]

Well, it was to increase efficiency, right? So we had this efficiency factor, the efficiency KPI that we looked at, which was gross profit per. Per labor dollar spent. And ours was significantly higher than theirs. And so what they had done is they had shut down the building division, but they took all those people that were in the building division and they said, okay, now you're earthwork guys. I see. And if you can picture, let's say a building superintendent, a vertical superintendent, he's got a crane on the job, and if he makes 10 picks a day, he makes 10 picks a day. Right? He makes two picks a day. You got to have the crane there. But in the dirt world, it's like, okay, are we turning 18 second cycles on this machine or 15 second cycles? And there's just a different, a totally different culture in that side of the business. There's. To me, there's not as much urgency. And so we, you know, we reasoned that if we can, if we can drop the revenue goal significantly and like usher those folks out that didn't want to be building dirt guys, they just were there and we usher those folks out. So just getting rid of that component, which made up probably 40% of the workforce that knew Nothing about dirt work, okay? Just that was going to help bring that gross profit per labor dollar up,

[Interviewer]

which is, which is what they should have done, but they had the mandate from HQ across the pond.

[Herb Sargent]

So there's this weird, you know, I talk to all these people, there's these, I want to grow, I want to grow, I want to grow. Why don't you just want to improve your margin first? Let's improve the margin. Let's make more money without even taking on more risk. So when we bought the company, you know, we were doing 20, they were doing about 120. And our first business plan was for the combined businesses to do 70. So we were going to just totally take pressure off the market and, you know, and hopefully get the bid margins up, but also the execution margins up.

[Interviewer]

Was that nerve wracking?

[Herb Sargent]

Not really, no. I mean, there were some people, like we went to the estimating team and said, okay, here's what we're going to do. We're actually going to reduce our volume. And they look at me with, you know, moon faced, like we've never heard this before. Okay, but it's going to be all right. And the margins they were bidding the work at were insanely low, like barely to cover overhead. And we said, we're going to mark the work up. You know, we're going to focus on the cost too, but we're going to mark the work up a fair amount to cover overhead and then some profit. And that was that really set the estimating team. Like, we don't see how this is going to work, but we just said, okay, but we're going to look closely at the cost and we're going to, you know, we're going to do a couple jobs here. So we combine the teams. We had a Runway job up in Greenville, Maine, and we combined the teams. Tim, another Tim's ideas. We need a quick win that we can talk about for the whole team. And so we went and did this Runway job for the. With the whole team or the combined teams, people from both teams. And it went really well. And we went back to the estimators. We're like, look at the cost of excavation on this. And you guys have been bidding, you know, 25% higher. So what we're going to, we're going to get the cost down and we're going to get the markup the way it needs to be. That was really the only. Everybody else was fine. Like when we were doing due diligence, Tim and I were going out to the projects. We we were riding out with their VP Ops and we'd stop at a job, look it over, and we had to figure out what the cost to complete this job was, which is quite a project. You know, when it's underway and you don't have any basis for the original estimate at all, it's quite a job. But when in doing that we ran into a lot of people. You know, people knew Tim. Almost all of them knew Tim because he'd only been gone a year and some of them still knew me. And just getting to see those people and, and I remember there was one superintendent that we went to visit his job and, and he said, this is the best. I told my whole, my whole job today when this news came out, this is the best news we're ever going to hear. That made us feel really good, you know, so we, we, I think we underestimated that reception.

[Interviewer]

Did you have any issues with leadership? Did you have to usher in?

[Herb Sargent]

So the VP Ops decided that he, he said he wanted a contract that would pay him like 3 years salary if he was let go or if he left for any reason. And I said, look, I don't have a guarantee, you know, I mean, I don't have. My house is here on the line. I don't have any guarantee. And you know, neither does Tim, neither does George. There's no guarantees. And so he decided to leave. But really everybody else, everybody else stayed.

[Interviewer]

What'd your dad think about all this?

[Herb Sargent]

I think he was nervous. So he still owned about 10%, you know, so when I went and talked to him about it, that I had this opportunity, he said, you know, you, you can take a look at that if you want, but I'm not bringing any money into it. So you got to figure it out. And fair enough. You know, he was 65.

[Interviewer]

Maybe a blessing though, in the grand scheme of things.

[Herb Sargent]

Yeah. Oh yeah. So he was like 65. And you know, that's not the time you want to push your chips out on the table, right?

[Interviewer]

Yeah.

[Herb Sargent]

But reading back through his journals now through that period and some of the comments he made, like, I can't believe he's still chasing this. I can't. I thought this was over with. But he's still going after it. He's like, there was a lot of comments like, I can't believe he's, he's not giving up, you know, and, and so it was, it was a big deal. They made it, I would say, not cheap, but easy, simple, not easy to evaluate it and put a value on it. And, and they were able to understand that there was a lot of risk involved in the work we were taking on and they were willing to talk about a discount to that cash that they had deployed. So when it came in, we got to keep some of that cash. That helped kind of get our ratios where we needed to be. The other, the other thing we did is we sold almost all the equipment like immediately with Milton Cat. They came in and here's the low beds and we rented everything to replace it. And so that was another one of those things that, that they. Now we've got a good backlog and the people are seeing, they've been seeing the equipment fall apart.

[Interviewer]

It was pretty tired.

[Herb Sargent]

It was tired. Well, not old, but tired. So there was, you know, we had 100,000 pound hose rented and there was a 349 parked out back. 345 I guess at the time. And I asked the equipment superintendent like, why is this here? And we've got like six rented. He said, that won't run one day in the field. It's four years old. I said you got to be kidding me. That's so sad. And he goes, that's not the saddest part. There's a twin to that one at Milton Yard, Milton's Cat. Milton Cat's yard in Brewer. And they just won't let us put any money into it. So now all of a sudden the crew is seeing all this tired iron go away and being replaced place with brand new iron. And we were honest with them, you know, we're renting the stuff but they don't care if it's rented or owned. I mean I think they would prefer it be owned. But so I, I think the morale got really good around the he Sergeant piece. And, and then we got together in the fall of, of 2005 and we're like, what are we going to call this? We're going to call it Sergeant and Sergeant probably not. Don't think the he Sergeant people are going to respond very well to that because we had literally, it was almost like the Civil War.

[Interviewer]

Yeah.

[Herb Sargent]

And inside Sergeant Sergeant. I had used he Sergeant as like our enemy. Like we've got to beat those guys. We can beat those guys and we have to beat them. We have to prevail. And we, you know, we did in the right way at the job level. But so we couldn't, I didn't, we didn't think we could call it Sergeant Sergeant but I also didn't want to call it he Sergeant because there was, they had they had bled off a lot of reputation over the last few years. So we just said at our off site retreat, we said, let's just call it Sergeant Corporation, which. Which Chase Harris and you guys said, let's just shorten it to Sergeant when we rebranded in 2020. But. And then later that fall, so my grandfather was still Alive. He was 99 years old, which is

[Interviewer]

the most incredible part about all this.

[Herb Sargent]

It's really cool. So what was that going into the evaluation? Yeah, I went and sat down with him and talked to him about it. And he said, really quiet guy. He said, no, Herb, just make sure you don't evaluate on the emotional merits, like look at the business merits and if it wins on that, then do it. If it doesn't, don't get emotional about this. But, you know, we felt like it was going to win on the business merits and Frukon wanted it to happen. And you know, the day we closed, I went over to see him. I mean, his office, his house is literally right beside the office. And he had this big double glider swing he kept outside. He was always in. And I went over and sat down with him and he said, I wanted to come over, but I was afraid I'd get emotional. And I probably would have gotten emotional too. But then we went through this off site meeting, settled on the name Sergeant Corporation. So that's kind of like in between he. Sergeant, Sergeant, Sergeant. Everybody could live with that. And we had our company party there in November. And at the end of the party or right before the comedian came on, he reached over and tapped me on the shoulder. He said, do you have a microphone I can borrow? Like, no, we'll get him. So we got him a microphone. He stood up and it just really quiet. And he literally just said, I hope you all can see the opportunity you have here if you work together. I see great things for this company.

[Interviewer]

At 99.

[Herb Sargent]

At 99. And you know, we lost him about five months later. But it was, it was a pretty cool thing, you know, for him, for the. I think it was good for the people to hear from him. It's incredible that. That he believed in them, huh? Not me. I mean, I think he believed in me, but he believed in them. That's what he was saying, like, I trust you guys to do this. And that meant a lot, I think, to them.

[Interviewer]

So fast forwarding then to the most recent. Not the most recent technically, but the one that's most memorable. The recession. 9, 10, 11. I know that was a, an adventure to say the least.

[Herb Sargent]

Oh, yeah.

[Interviewer]

That was not just you but the entire construction.

[Herb Sargent]

Entire industry. Yeah.

[Interviewer]

So you complete this deal in 2005. 2005, yeah. And it goes pretty well.

[Herb Sargent]

It went very well. Yeah. For years, you know, we were able to, I talked about that gross profit per labor dollar. We were able to close that gap, you know, when we, when we released the former building people. And then what we were left with was some of the best builders in New England.

[Interviewer]

Sure.

[Herb Sargent]

And they were no longer encumbered by the people that didn't really care if they dug a bucket of dirt or not. They weren't encumbered by then. I mean there was, there was a lot of energy there. And we started talking about cycle times again and I'd get stories from the field like so. And so was 17 and a half seconds per cycle on his, you know, on the 349. And they just took a, began to take a lot of pride in that. And we saw that gap begin to narrow on that gross profit per labor dollar. And so we really, you know, that was the thing we sold the bank and the bonding company on is that metric, you know, and that we think we can manage that metric up to meet where Sargent and Sergeant was. And I'm not sure we ever got fully there but we, we've done well with it, especially the first few years. And the work was steady. A lot of work. A lot of big box stores. We started negotiating a lot of pads for Walmart and Lowe's and Home Depot.

[Interviewer]

But that was essential to keep meeting these obligations with the bank and the bonding company because it still, as well as it's going, that's still a very big bite.

[Herb Sargent]

Oh yeah, yeah. No, it was a massive debt service we had to cover.

[Interviewer]

Yeah.

[Herb Sargent]

You know, and we were not employee owned at the time. That's. I own the, I own the company. I think two or three years in maybe three, four years in, my dad came to me and you know, his 10% was worth a lot more than it was in 2005. And he said, you know, this is going the wrong direction. You know, I shouldn't be taking value from you. So let's, why don't you redeem my shares and I'll get out and this can be you from now on. Which was I think the right way to do it, you know, so. But still, you know, in 2008, 9, we still had a lot of debt but we had a really good backlog. We were talking about wind power work earlier and we had some massive wind power projects and, and a Lot of work down in Mid Atlantic that were, that was still working out well for us and through 2009. Actually, 2009 was the best year we ever had up to that point. And then 2010, 11, 12, 13 started to fall off. And we never broke our covenants with the bank or the bonding company. We were always within our covenants, but we were getting close. In 2013 was the year we became an ESOP. And. And we actually lost money that year.

[Interviewer]

Yeah, the. And I just don't, I don't know how to explain the feeling of financial pressure in business for, for, for years. Like, there's one thing that's acute financial pressure and then there's a whole other thing that's just years of pressure.

[Herb Sargent]

Survival mode, right?

[Interviewer]

Survival mode. It's just, I mean, we, like, I've talked a lot about this. Like, we recently had like a. Not anymore, thank God, but like a pretty long stretch. Like months and months and months and months. Every executive meeting on Friday. How much cash do we have? How much do we need payrolls every two weeks. Was it a payroll week? Oh, thank God it's not a payroll week. All right. The following week. So how much is payroll? Okay. Like, how much do we have? How much might be coming in? If that goes out, then we can't pay this bill. Like it is. It's just brutal because it's just, it's just such a grind.

[Herb Sargent]

It's. It's the only thing I can compare it to. And I've never been buried in a trench. Right. But is, is like being under the weight of, of all that earth and it's, you know, it's just pushing on your chest, you know, and it, I can't say, you know, physically it's hard to breathe, but mentally it's hard to breathe. Yeah, it's just, you know, it occupies your mind in a way that, that doesn't, it doesn't let less intrusive thoughts and you know, that that might make you happier. It's, you know, it's just always there. And there was quite a few years of that in the early acquisition. Well, a few places in the early 90s when I started in Sergeant Sargent and then post acquisition 2005 to 2013 and then trying to come back up out of it in 2013 and on. And the effect that it has on the way you think about business and what you think is possibility, what you think are possibilities in business is pretty dramatic because if you don't have. I tend to think of these things in terms of Altitude, you know, and if you're flying at 32,000ft and you lose power in your engines, you've got 20 something minutes before you land because you glide for all that period and it's like 32,000 square miles. You can pick a place to land. If you're flying at the treetop level and you lose power, you got about 40 seconds to find a place to land. And it's probably going to be in a tree, right? And you don't have the luxury of making a turn into a spot that might look more open. You've got about 30 degrees on either side of you. So the point with that is like if you're flying high, at a high financial corporate level, when the pressure comes, if the bank starts talking to you, funny, you can do some things, you've got some time to react, you can offload some resources or whatever, you can liquidate some things if you have to, you can stretch this out or whatever. But if you're at the treetop level and the bank calls you, no, you're done. You're in the trees.

[Interviewer]

Well, in the bank, I've heard enough. There are good bankers out there, but they're your friend until they're not. And they don't care. If they call something and you don't answer, they're coming for you.

[Herb Sargent]

I've been fortunate to either have gracious bankers or, you know, I think some of it, you know, they look at the past track record and say, okay, are we going to recover from the stall? And we've never had the pressure of, of having a note called or, or even being threatened. We've, we've been, I think there was one year, 2016 or so, that we were, we were brushing up against the covenants and we just had to do some things differently. And, and we did do that was, you know, the argument about maybe taming our revenue a little bit and letting our people grow into this. And, and you know, we, I would say that argument that we had that day, neither one of us won it, but neither one of us lost it. I can't say there was a lot of understanding that was had, but I, I just basically said, here's what we're going to do and we're going to do it. And you know, we, we went out shoulder to shoulder and said, okay, this is the deal. But we were able to get our numbers back up, you know, our gross profit the way we wanted it. And this is now coming out of the, the, the recession. And this is where you may have Heard me talk about this. My. Probably the biggest mistake I ever made was during that 2010 to 2013, 14 period, we didn't develop people, we didn't recruit people. Like, we just all. It was all. We didn't have the freedom. We didn't have the luxury to think ahead 10 years. Like, we were trying to keep the plane in the air for the next mile. And so when the economy came back, and all of a sudden there's two bidders on every job instead of 12 bidders on every job, we didn't have the people to do the work. So the gross profit per labor dollar that I bragged about back in the 2000s, we didn't have that luxury anymore because we didn't have the people to do the work.

[Interviewer]

I would argue that's the entirety of the construction industry right now. My argument is that I don't think construction companies have actually developed their workforce because they haven't really had to. Yeah, there were a lot of. I feel like the construction industry was. Was matched very well with the US Economy and the workforce for a very long time. It's where. It's what built the country to begin with. It extended through World War II into the interstate era. And. But then everything changed. Everything changed. Like, 60s, but especially 70s, 80s, 90s, and the whole makeup of the economy in America and our population, well, almost on a dime changed.

[Herb Sargent]

Yeah.

[Interviewer]

And I think that's one of the core problems right now is we just as an industry, haven't been actively developing our workforce because we haven't had to. It's not wrong. It's just we haven't had to. And now we're sitting around like, we

[Herb Sargent]

have a lot of work to build,

[Interviewer]

but we can't build the work. We've got the equipment. I can go get as many excavators as I need. I can go go get all this fancy technology. I know how to build it, but I don't have the people to execute the work. And so that's where I think the, like, I think you guys figured this out years ago.

[Herb Sargent]

Yeah.

[Interviewer]

But I think the construction industry is now having to reckon with this now.

[Herb Sargent]

Yeah, it's. It's. It's been, you know, in 2015, I mean, that's when I started feeling it. Like, all right, I'm looking at our numbers, and we got 10% of our people are under 25 years old, 64% of our people are over 40. And like, that's not gonna. That's not a demographic mix that's gonna serve us well, in the future, like those people that are over 40, love them. And what we've got to do is figure out how to get their knowledge into the. Into the younger people. And so in 2015, Kevin Gordon, who I think you've met, was a regional manager for us. And he and I started laboring together in the early 80s. Actually. He just was awarded the first ever Herbert E. Sargent founders award last April 10 for his service to the company, which has been phenomenal. But I went to him and I said, kevin, because I've watched him over the years, just a great teacher. In fact, that's what he went to school for, to be a phys ed teacher. He's not a construction management grad or anything like that. And I went to him, I said, I'd like to start a workforce development, workforce advancement position and I'd like for you to lead it. And we're going to start having an Academy next year. 10, 15, 20 kids. And since then. So in 2012, 10% under 25, 64% over 40. Now we have 25% under 25 and 64% under 40.

[Interviewer]

That's amazing.

[Herb Sargent]

So 36% over 40. And it's just, I mean, that's a huge turnaround and that's in a growing employee base, you know, from 325 to about 600 now. So it's not like we just fired all the old guys. Right. So, you know, I feel good. But that, that kind of speaks to that, that huge leadership mistake that I made in, you know, back in the, in the early 2000 teens, where we just didn't invest, we didn't have the, we didn't have the wherewithal to do it. And it's, it's got us in a place where we never want to be at that low in altitude again as a company so that we can't think about the future. More

[Interviewer]

talk about selling the company to the esop. Yeah, to the employees. And when you did it.

[Herb Sargent]

So it was 2013.

[Interviewer]

Yeah. But why, why 20? Like the timing.

[Herb Sargent]

So the timing was interesting. I had looked into it for a few years. Well, actually, the first time back in 2003, when we first looked at buying he Sargent, we had a consultant there and he goes, man, look at this. You know, you make this much money and Herb, look at your net worth. It just ticks up. And I said, that's all great, but someday I gotta get out like that. That's net worth on paper.

[Interviewer]

It doesn't mean anything.

[Herb Sargent]

Doesn't mean anything to me. You Know, maybe I can take some money out as time goes on so I can have some personal wealth. But that wealth is in the company. It's gonna have to stay there for a long, long time. So we've gotta get out of. I've gotta get out of this. The company's gotta survive me somehow. And that was just kind of a thought that I had. In 2003, we made the acquisition still on my mind. In 2008, we hired a guy to do a viability study. And frankly, it didn't work well for me. He came in with all these notebooks, and here's the deal. We can do this. We can do this. And, Herb, if you take this money, you can put it over here, and it grows tax free forever. And it was like, well, I remember the guy's name was Lou. Lou, this is all about me. Oh, yeah, that's what you're. No, but I want the company last. And so we kind of shelved it for a while, and then as two. Then I got in a peer group with the CFO from Emory Sapp and Sons, and he had put their ESOP in place. Yeah, Keith Bennett. And they had been. And he's now on our board. They had been an ESOP for, I think, 10, 12 years at the time. And so my CFO and I went and met with him 2012 now. And I said, can we come out and visit you guys? Just talk to your people. Because one of the things, I mean, I'd heard about ESOPs, like in a factory setting, where everybody, you can gather everybody up and talk to them, but I never heard about an ESOP in a distributed workforce like we have. And they had that. So we went out and met with, I think about 20 people. And Keith said, I'm going to leave the room. And you guys, you ask him any question. And he turned to the people, he said, whatever they ask you, you just be honest. And so that went well. Then we met with Keith, CSOP attorney, and we had sent him our financials going back five years. So he had the 8,90809 financials that were really good, but then he also had the 10, 11, 12 financials that were not so good. And he said, you know, Herb, you need to wait five years and get your numbers back up and you can double, you know, your. Your take here. And he had a flip chart behind him. And I said, well, just, I know you're not a valuation company, but you've got some idea, like right on that flip chart what you think the number is. And he wrote it down and I looked at it, that was more money than I thought I'd ever have in my life. And, and we left and I said to George and Tim, I said, I don't need more money than that. Like if I, if I wait, number one, I, I'm not sure the company can even pay me what he wrote down. If we double it, like I'm positive the company's never going to be able to pay that, so what's the sense in doing that? And plus, even if they could, you know, I love my kids to death, have a great deal of respect for them, but they're not working in the business, you know, they're doing their thing. And if the company does double, the price does double in five years. Who earned that? It's the people in the business earned it. And for me, you know, and it's already more money than I can spend in my life. My kids are going to get the rest. So if I get double there just means they're going to get more. And I don't think that's the way they want it either. And it's going to come off the backs of the people that earn it. And so I said this is the right time. And plus the timing wise for me, I was 50 years old and it allowed me to, I think so many owners avoid the succession question because it's so big and for me, if I could simplify it by taking the ownership aspect out of it. And now I've only got to deal with the leadership and you know, the management succession, it simplifies it a lot. So that gave me another 10 or 12 years, which is the way this has worked out. You know, it's been 13 years now since then and I retired 12 years in that I could, I could then keep the company, manage the company, try to work on the succession and have it work out the way we want and at the same time the people in the company get, get the benefit of that build up if it happens,

[Interviewer]

which it has, it has. Where did that insight come from though? Because I've seen succession play out quite a few times now. Yeah, like we were talking about earlier today, I'm. Now you're in this position as well in a lot of ways. I'm just in a weird position where I'm like, I don't even know why I'm standing in this room with all these people, but I am. And I have like no horse in the race whatsoever. I'm just like, they're kind of just Spectating.

[Herb Sargent]

It's a cool position to be in.

[Interviewer]

It's really unique and it's very. But it's very high level because I don't really understand anything. I'm just kind of like listening to conversations. Conversations and watching. It's like, oh, that's interesting. I think. What, what, what's, what's, what's disappointed me with the previous generation in the construction industry. And I'm not here to tell people what to do with their money. Like, it's your money. Do whatever you want. And I have no problem with people being rich. Like, if you want a plane, I want a plane. Go ball out. Good for you. But what's disappointed me is how many people have taken money out of the industry and have not put anything back in.

[Herb Sargent]

Yeah.

[Interviewer]

And, and that to me, it, it just. I've watched so many acquisitions where you have all these people working out in the field the day after the acquisition. They're no better off.

[Herb Sargent]

Right?

[Interviewer]

There's. There's one person or a small group of people that are. But the majority are not any better off. And I would argue most of the time they're worse off. And that acquisition, especially if you happen

[Herb Sargent]

to be in the admin. Right.

[Interviewer]

Yes. Yeah.

[Herb Sargent]

That synergy thing kicks in.

[Interviewer]

Yes. And then that money is then taken and it's just been, it's then just like stuffed into like some weird trust scheme. It's stuffed into real estate. It's stuffed into like J.P. morgan Private Bank. And who knows where it goes from there. Like it's. Then it'd be one thing if it was like even a little bit, came back into the industry, was like. And then reinvested in making the future better. But it just, it just leaves.

[Herb Sargent]

So that's, I mean, when we started looking at esop, it's like there's four ways, as near as I can tell, four ways you can transfer or get out of your business. You can sell it outside, which happened already in 1988, and that went like shit. You can sell it to some internal folks, which is a good option in some, in some construction businesses. But heavy civil is a really capital intensive business. So those new owners have to have the capital to prop up the banking and the bonding programs. And in a company the size we were, that's like nobody in the. Nobody that's worked their way in the business has that kind of capital unless they got it independently some other way. So that's not real viable. You can have an auction and that's super expensive because you've Got all these jobs you're trying to wrap up and they all wrap up at different times. And as soon as you send out the signal, you're going to have an auction. You know, people start leaving and you. So that's just not a very effective way to do it. And then the ESOP way was the one that it's tax efficiency. ESOPs don't pay taxes. So, so you can, that's how one of the ways you can pay off the owner over, over time. But it also builds a, really has the opportunity to build a really substantial company, really durable company that could, you know, make it recession proof. As long as you do it right. As long as you, you know, manage things right. It, it benefits the people that are out there doing the work, which, you know, I, I think the world, I mean those are my people. Like I feel I always wore work boots and jeans every day at work and if the banker or the attorney thought I ought to dress differently, fuck em.

[Interviewer]

Yeah.

[Herb Sargent]

Because those aren't the people I feel like I need to relate with. I need to relate with the people that are building our work. And so I just have always had a heart with that, with that crew out there doing the work. And I just said, you know, this is a better way. And when you think about, I've become almost too ESOP centric like I think every company ought to be an esop. Now if you think about capitalism in that way, capitalism that benefits the people that are doing the work and the wealth being distributed at that level. And you're building a whole new class of people. I mean it's like better than the middle class that probably were not, you know, even in that middle class.

[Interviewer]

But I, I would argue, yeah, you're building a new class. But you're, you're, I think you are building the middle class. Like I don't think there's a middle class in America anymore.

[Herb Sargent]

Yeah. And I think some of the middle class has gotten so much richer. They're not middle class. Some of them gotten down.

[Interviewer]

Exactly. It's, we've been pushed in either direction more than ever. So there's been more wealth creation than ever. But it hasn't, it's, it's benefited fewer people than ever. And, and you have more people struggling than ever within the states. That's, we're supposed to be the greatest country on earth and we've more people struggling than ever before. So are we winning? I don't think we are. And, but, but then you have the reality of the marketplace itself, which is I think wages in the construction industry, depending on the state, are just, it's really tough to get ahead in life and to have a, to have three kids and have a nice house and have a good vacation, two vacations every year, like, and to have a one income household, like on the wages on average in the construction industry, that is mathematically very, very, very difficult. And then now you're not getting ahead. You're not saving one bit. So now you're betting on, to keep you, to keep you safe long term, to keep, to allow you to retire. You're counting on a 401k and you're counting on Social Security. A 401k. I believe in 401k less and less and less and less and less every year that goes by because it's all built on the stock market, which, yeah, I'm starting to believe is kind of a racket and not really reflective of the United States economy. And then to Social Security being there when I'm 60, I, I would make bets on so many other things happening over that.

[Herb Sargent]

I mean, I made the mistake of logging into my Social Security account and looked at my benefit levels and I look at what I paid in, what

[Interviewer]

you paid in my career, which you maxed out.

[Herb Sargent]

And I just. This quick spreadsheet and I said If I made 8% on everything that I paid in my Social Security payment, like if it's Herb's own account, yeah, I would have 10 times more money there.

[Interviewer]

But you're, you're better than me because I'm going to pay in for decades.

[Herb Sargent]

Yeah.

[Interviewer]

And I don't, I don't, I don't think I'm going to see a dime because I know the program doesn't work. And so, and so, so then when you start to do the basic math on it, people aren't getting ahead. Retirement is all built upon a 401k, which again, is, it still functions great, but I think is kind of a sham. Social Security probably not going to be there for my generation. How do you get ahead? And, and then it like, is, to me, mathematically, it's like employee ownership is, is one of the only vehicles I think it exists to get ahead. I think, you know, in today's world,

[Herb Sargent]

like I, like I said, I, I think I, I love the model. I mean, on LinkedIn, my banner is Aesop Lover.

[Interviewer]

You're like the Aesop father.

[Herb Sargent]

Yeah. And, you know, then I'm betting on the millennials and younger, because you guys are the ones that are going to change this world. For us, I mean, so it just seemed, going back to when we did it, it seemed like the right time. It gave me enough time to manage the company still in the future and get management succession in place, which wasn't perfect, but we got it done. You know, we, we didn't really have. We, we weren't, we weren't strategic enough about it. You know, we, frankly, we kind of lucked out when Eric and Tasha walked in the door.

[Interviewer]

But that's part of business.

[Herb Sargent]

I mean, but relying on luck is not the way you want to go about it, right? And when you, you know, you read this book, there's a lot of it that's luck. You know, when Herb started in business, I start the book with a, with a quote from Henry David Thoreau's book about running a wooden bateau down the rapids. And he basically says, you just gotta dodge all these boulders, but you can't stop. And Herb got into, you know, a society that was building, and that doesn't take anything away from Herb. There was a lot of other people that were in that same society that didn't harness the tailwind like, like Herb was able to do. But just, just going through all this and then getting it to a point where now, you know, in this weird way that I never thought, I never would dream of, we've got the stability and the financial freedom to make 20, 40, 60 year investments. You know, like this office we moved into two or three years ago, that was a 50 year investment, you know, and for me, I've been, as we've gone through the last several years, last five years of my career, it's like, okay, what kind of things do I need to do that will take it off their plate in the next 10, 15 years?

[Interviewer]

We've got to get you to lunch within the next few minutes and then make a flight. After writing this book, after all the conversations you've had, after the life experience that you've lived, after the events that you've attended over the past few years, what is your. And I think you've alluded to it quite a bit, but what's your core message to the, to the next generation coming up here in the industry?

[Herb Sargent]

Well, I'll address it to our people and anybody that's listening can see if it applies. But the core message to me is, and I wrote it in here, the meaning we take. Like, like, I tried to address the meaning of what Herb did with his first bucket full of dirt that went in a truck. Now to that day, on that day that was Just him trying to earn a living. And now back to James Clear's, you know, idea about meaning. What does it mean to us now? Like, what if he'd never done that? You and I wouldn't be here. All those employees at Sargent wouldn't be employees at Sargent. We wouldn't be esop. We wouldn't have the value in these accounts and what the meaning is. And I thought a lot about it, and what I figured out is these people in this company shape me way more than I shape them. This work shaped me more than I shape the work. And how I can use that to the benefit of other people in the industry is in. To the benefit of our people is where I want to focus. Because the people in this industry are the hardest working people, the biggest hearted people, probably the most misunderstood people. And you've been on this mission to help make them better understood, to help make the dirt world a better place. And, and that's kind of where I am. Like, I, I've, I've spent some time in the last few months talking to a number of people. I, you know, I posted on LinkedIn if you want to talk, I got no dog in the fight. Just a one hour conversation, let's have it. And I put a questionnaire out there and I talked to like 35 people. And what I think I've learned through that is, is we talked a little bit about, you know, the owners kind of being crushed. And what I think I've learned is the biggest, the biggest impediment for us making the world a better place, a better life for our people is frankly, it's a leadership problem. And it's not that they don't mean well. It's that they just, you know, like I did, I say in here, I had the business instincts of a dung beetle. I really, you know, and I was just being crushed and it was, I wasn't helpful for my people. And that's what I'm seeing everywhere. I'm seeing it in some of these peer groups, not everybody. But for me, the takeaway is, you know, let's build the spirit into this and that we can make a difference. Every. That's the way I close the book is we had an employee that filled out a survey that said after our employee meetings last year in 2025, and it said, I can make a big, I can make a difference in this company, even small me. And I just think with a spirit like that, if you can, if you can go to work with a spirit like that, the things we can do are amazing.

[Interviewer]

Well, and that's. And I think if we can instill that spirit within everybody, within these companies, and they go out and make their part of the world better, we can make a dramatic.

[Herb Sargent]

And the owners of the companies.

[Interviewer]

Yeah, yeah, yeah, exactly. But we can make a. Collectively, a dramatic difference in the future of America.

[Herb Sargent]

Yeah. I believe it doesn't get built without us. Right? I mean, you. This is your rallying cry. It doesn't get built without us. And, you know, there's. There's a lot of pride, and I think our people. Our people in our company, and I think most construction workers do take a lot of pride, and there's a rare one here and there that's like, I'm coming for the paycheck. Just pay me. But. And sometimes you start that way. You know, in, in this respect, somebody asked me, like, why do you care so much? And I had to think about that. And I. It's almost like I did this because it was a business move. And then when I saw the difference it could make, it, it was like, this is cool. And I should have. I wish I brought my heart forward first instead of the business forward, but my heart's in it now.

[Interviewer]

Yeah. Well, thanks for coming.

[Herb Sargent]

Thank you.

[Interviewer]

Want to hear more from you. You're on LinkedIn.

[Herb Sargent]

LinkedIn. Herb Sergeant.

[Interviewer]

Herb Sergeant. And then you've got a regular podcast, Starbuck and Sar.

[Herb Sargent]

Oh, yeah, yeah, that. Yeah, Your.

[Interviewer]

Your, Your co. Host is a bit of a knob, but you. You offer some pretty good insight, actually.

[Herb Sargent]

You know, can I talk about that for a minute?

[Interviewer]

Yeah.

[Herb Sargent]

So he, I heard him on your podcast. And then Dirt World Summit in 24 comes up, and I was just like, I gotta meet this guy. So I reached out to him and we met. There was Ruth's Chris, right, at the. At the hotel, and we met, I think, at like 5 o', clock, and we ended up closing the place, and then we went the next night and closed the place again. And I just, I love that guy and I just think he's got such keen insights and he's. He just boils things down in a way that, that I can't, you know, and, and I'd say, you know, like, my, the benefit I bring is the experience. The benefit he brings is the currency and, and, and the way that he boils things down. And so I reached out to him last spring, I guess, and said, what do you think about starting a podcast? So we started recording last fall, Starbuck and Sargent. Yeah. And we're having a good time with it. I think we had 10 or 11 episodes out right now.

[Interviewer]

Good. Excellent. Yeah, I've listened to some. Really enjoy it.

[Herb Sargent]

Y.

[Interviewer]

Awesome.

[Herb Sargent]

Well, here we are in Nashville. Thank you.

[Interviewer]

Yep. Thank you.

[Herb Sargent]

Thanks for everything you do.

[Interviewer]

Yeah, likewise. It's a two way street.