2014 Horatio Alger Award Winner
"It’s better to hire a fast nickel than a slow dime."
Lee Anderson, an only child, was born in 1939 in Minneapolis, Minnesota. Both of his parents were orphaned as children. Lee's mother, Lucille, orphaned at seven, went to an orphanage and eventually worked as a salesperson in a department store. Lee's father, Reuben, was orphaned at 14. "My father was of Swedish descent," says Lee. "He moved in with a Swedish neighbor, following the death of his mother. At that time my father left school—he was in the eighth grade—and became an apprentice plumber to the man who had taken him in. He would get up at three in the morning and harness the horse to a cart that was loaded with their plumbing tools. My dad was one of the smartest men I have ever known, even though his education was limited. He really wanted to succeed in life. When he was 22, he went out on his own and opened a small plumbing shop."
Lee describes a happy childhood even though the household income was quite modest. His hard-working parents taught him to value what they had and make do without extras. For entertainment they gathered at the kitchen table after dinner and listened to the radio. On weekends, they went for drives in the country. "In the days during World War II, gas was rationed," Lee says, "and we could only go for drives when my father had enough gas coupons. We led simple lives, but I felt loved and cared for. I had all that was necessary."
Though Lee's father lacked a good education, he was determined his son would get a solid education. Each day on his way to work in St. Paul, Rueben would pass by a building under construction. One day, he stopped and was surprised to learn it was a school, but construction had ceased due to lack of funding. Lee's father offered to do the plumbing at no cost in exchange for his son's tuition to the school once it opened. Breck was a small, military school for boys which Lee started attending at age seven.
As a boy, Lee caught frogs and sold them to the local bait store. He also smoked bullhead fish and sold them for 25 cents each. At age 14, he worked in warehouses on Saturdays and throughout the summers. His father told him warehouses were invented to give boys a place to work. Lee's duties included cleaning and moving equipment. On Friday paydays, Lee put his earnings directly into his savings account.
"Working hard was important to my father," Lee says. "He worked six days a week his whole life and I really admired him and wanted to please him. He was very reasonable and rational. He taught me to trust my intuition, which I think was helpful later in my business life. He knew right from wrong, and I tried to pattern my philosophy of life after his. He had a lot of rules for good behavior and when I became a father, I enforced the same rules with my children. We call it 'growing up Anderson.' My mother was also an important role model for me. I'm not sure she even went to high school, but education was important to her, and she taught me to take it seriously."
Lee graduated from high school with honors in academics and athletics. His six-foot-seven athletic build earned him scholarships to play football and basketball at numerous universities. Yet his father advised his son to attend West Point. "It was a free education for one thing," Lee says, "and my father told me I would never regret going there. Once again, he was right."
At West Point, Lee played football for two years and played center on the Army basketball team for four years. "I enjoyed West Point," he says. "My time there formed the basis for everything I believe in today about duty, honor and country. It was a challenging time both mentally and physically but I was determined to make it. When I graduated in 1961, I was excited about my military career. Things didn't work out exactly as I'd planned, but I think it went the way it was meant to be."
In 1963 Lee's father suffered a severe heart attack. Reuben's long- term plan had included Lee's military career before he returned home to run the plumbing business. During the recovery from the heart attack, Reuben requested his son to return home immediately to "show Lee the ropes of running a business" while he was still able.
"That had always been our ultimate plan," says Lee. "I was going to have a 20-year military career and then return home to be a plumber. But my father's health scare changed the military part of things. I was reluctant at first to leave, but I thought my dad knew best. I could never think of a time when he misled me."
In addition to his plumbing shop, Lee's father had an interest in a small, 13-employee company, Asbestos Products Inc. (API). When Lee returned home, his father sent him to the company to "look around for a week or two." Within about 10 days, the company's manager quit. He stated that Lee asked too many questions. "I called my dad to tell him what happened, and he asked me to go ahead and run the company, so that was my start in business. I never did go to work in my dad's plumbing shop even though I did get my plumbing license."
That small company eventually became APi Group Inc. Without capital, the company inched its way forward until 1972 when Lee was able to invest in several acquisitions. He looked for troubled situations which by their nature best fit his budget. He took risks and on several occasions, nearly lost his parent company by over-leveraging debt to equity. He clearly recalls many sleepless nights then but his drive and intuition paid off.
"Today, I'm asked if I had a master plan about acquiring companies and building a big business," Lee says, "but there was no plan. I simply saw value in failing companies and felt if I could make a few corrections in the way they were run, they would become profitable again. I'm not sure where I got my business acumen. Over time, I developed a business model of what works and I have never strayed from it. Fifty years later, my company has more than $2 billion in sales and over 10,000 employees."
APi Group is the holding company for more than 40 independent fire protection, energy and industrial and specialty construction companies located throughout North America and the United Kingdom. It is recognized as the number five specialty contractor out of 600 by Engineering News Record (ENR) 2012.
Lee is particularly pleased with a work program he developed that ties his love of the military to his passion for business. The APi Group Leadership Development Program was created to hire service-academy officers who rotate out of the military into civilian life.
"These are people who have had 10 to 12 years of experience, serving mostly in Iraq or Afghanistan," he says. "They come out of the service with leadership skills, an idea of teamwork and the ability to perform under pressure. When we hire them we put them through a one-year rotational program within our company, sending them to about five different businesses. Once we find a good match for them, they are given the opportunity to work for us. We have a 90 percent success rate with this program, and it pleases me a great deal to be able to give something back to those who give so much to protect our country."
Lee has had 50 years of success in business, but when asked to describe what success is for him, he is quick to say it isn't about money. "For me, success is having the ability to be able to help others. My wife, Penny, and I have been married for 49 years, and it has been important for me to be successful in my marriage. But overall, we live in a wonderful country that is full of opportunities, and I want to give back to it as much as possible."
His advice to today's young people: "There is no substitute for working hard. For young people to achieve, they have to get out front. By that I mean that they have to be assertive to succeed. They have to convince potential employers that they are the ones who will help their company prosper. If they do that and live a life of integrity and honor, I think they can prevail— even in this world of ours today where it seems to be so difficult to find jobs."
According to Lee, integrity is an essential characteristic: "I believe we are born with integrity but it is something that can be lost along the way. I learned about integrity from watching my father as I grew up. It's an important virtue and one I have tried to cultivate in my family life as well as in my professional life. I think it's difficult to go wrong in this world if you put faith, honesty and integrity at the top of your list of values."
Lee Anderson believes in sharing his wealth. "I've had a rewarding, successful career that enables me to give back to important causes and institutions," he said. "Hopefully, the funds I give away today will make a positive difference in the years to come."
In an effort to help wounded veterans, Lee and Penny Anderson gave funds in support of the construction of a new facility, the Lee and Penny Anderson Defenders Lodge, to provide short-term housing for veterans receiving treatment at the Veterans Affairs Health Care System in Palo Alto, Calif.—a hospital that serves nearly 20,000 patients each year.
In another initiative to help returning veterans, Lee gifted three-years worth of seed money to the U.S. Chamber of Commerce to launch its Hiring Our Heroes program, a nationwide effort to help veterans and military spouses find meaningful employment.
With gratitude to West Point for his education and the values instilled in him as a cadet, Lee and Penny gave $6 million to support the construction of a rugby complex, now called the Anderson Rugby Sports Complex at West Point. "I owe everything I have accomplished to West Point through my experiences there and the leadership skills and values I learned there as a cadet," he says. In 2013, Lee was awarded the Distinguished Graduate Award from the U.S. Military Academy at West Point, the highest honor bestowed on Academy graduates; and the Eisenhower Distinguished Citizen Award for his dedication to military families. That same year, he earned the Joel Labovitz Lifetime Achievement Award for a lifetime of entrepreneurial success.
Lee and Penny also gifted $60 million to the University of St. Thomas in St. Paul, the largest individual donation ever received by a Minnesota college or university. The couple has also given generously to the Children's Hospital of Boston for research related to muscular dystrophy after they learned about the disabilities of a grandchild.
In 2002 Lee earned the John F. Cade Award for entrepreneurial excellence from the John M. Morrison Center for Entrepreneurship at the University of St. Thomas. In 2009, he was named the national Ernst & Young Entrepreneur of the Year in the real estate, hospitality and construction category. In 2010 Lee and Penny were recognized with Minnesota's Outstanding Individual Philanthropist Award.