For some, necessity is, indeed, the mother of invention. For others, it’s a whole lot more.

No one knows that better than Mike Giampaolo whose ascent from the son of an Italian sharecropper with a fifth-grade education to the chairman and visionary founder of a privately held Canadian metals giant is living proof of the power of pure necessity and its ability to drive personal and professional success.

The pragmatic, forward-thinking, risk taker has volleyed a combination of self-taught welding skills and the $27 he had in his pocket when he arrived in Toronto just shy of 50 years ago into a family of metals assets that span metal and electronics recycling, aluminum production and steel service centers. Last year, the group, which now counts some 2,000 employees, generated Canadian $2.5 billion (U.S. $2 billion).

Despite the success Giampaolo has achieved in his 48-year career, he has never participated in an interview or been quoted publicly. Intensely focused, he insists there’s simply no need for publicity.

Briefly stated, Giampaolo’s mind is on his business and his business is on his mind. Although fully aware of his success and the smarts and ambition behind it, he is equally unpretentious and down-to-earth. What you see is what you get.

“Mike reminds me of Warren Buffet,” one friendly competitor remarked recently. “Buffet lives in a plain house and drives a plain car but you know who he is,” he added. “That’s Mike. He is ambitious, knows what he wants, and goes for it.”

Once afforded the opportunity to meet a high-profile personality, Giampaolo politely declined, explaining that if the celebrity wasn`t a stakeholder in the group, there was no reason to meet.

That mindset and singular focus has paid substantial dividends. The Giampaolo Group of Companies is a perennial entry on Canada’s Best Managed Companies list, which ranks organizations based on financial stability, strategic thinking, health, safety and environmental practices.

Add to that criteria a hefty measure of quiet generosity. The day before AMM interviewed Giampaolo, his organization raised over $250,000 at an annual charity event to benefit local children’s hospitals.

Not easily impressed, Giampaolo’s office lacks the gallery of trophy photos that typically line the walls of top executives. Instead, he favors photos of his family and one of three Matalco Inc. facilities, which together have quietly become North America’s largest independent aluminum billet producer. Matalco is capable of producing 750-million pounds annually of series 6000 aluminum billet earmarked for delivery to the automotive and construction extrusion industries.

In addition to Matalco, members of the Giampaolo Group include Venture Steel, a chain of steel service centers, and Triple M Metal LP, a conglomerate of metal recycling and processing facilities, which handles about 3-million tons of ferrous each year. Excluding Matalco, Triple M alone handles 300,000 tons of nonferrous annually.

Other members of the Group include Global Electric Electronic Processing (GEEP), which specializes in electronic recycling and ITAD services in the U.S., Canada and South America and Giampaolo Investments Ltd., a real estate land and development company.

Family first
Anything but interested in hob-nobbing with the rich and famous, Giampaolo is clearly most comfortable interacting with the Group’s inner circle of key executives, including his brother Antonio known as “Tito.”

The eldest of five, Mike Giampaolo found himself assuming the role of patriarch at the age of 11, when his father was critically injured on the farm the family rented. Following the injury, the family was evicted from the farm and the young Giampaolo was forced to begin making adult decisions as a teen.

“I learned how to work out of necessity and to survive and move the family off of the farm,” he recalled.

On the advice of his sister and armed with little more than the welding skills he learned on the farm and a fifth-grade education, Giampaolo set off at age 17 to find work.

“Conditions in Italy motivated me to search for a better life to take care of my family,” he said. “An immigrant must either survive and prosper or return to the environment of rural Italy.

“My motivation was to be relentless in giving my full energy to making each day more successful and never losing track of the relationships that were the engine of my success,” he added.

That pursuit led Giampaolo to take a job doing maintenance work, including dismantling and clearing plants at a steel company. It was there that he got his first taste of scrap metal trading in the form of selling metal debris littering the plant floor.

The experience Giampaolo gained there eventually led to the purchase of a warehouse and the formation of a scrap yard with a number of partners. The scrap venture went south and, in retrospect, marks one of the few instances he faced failure.

When that venture collapsed, Giampaolo started over as an independent scrap peddler. Joining him was his brother Tito, who immigrated to Toronto in 1978. “He’s my brother so I thought he could help me grow,” Giampaolo commented.

Forced to leave school in the fifth grade to work on the farm, Giampaolo is proof that ambition can sometimes trump education.

“You need to have the need,” he insists. “If you don’t have the need or the drive, you will never achieve and do well no matter how much school you have.”

He is quick to acknowledge, however, that degrees and technical “certifications” are growing in importance as the implementation of technology to improve quality and productivity increases.

‘Harvesting’ waste
For Giampaolo, the Group’s greatest assets are not the four shredders kept supplied by a couple dozen feeder yards, its’ three aluminum melting facilities or any tract of real estate the enterprise has developed. Instead, he said, the organization’s most valuable assets are the hundreds of dedicated employees motivated to learn and perform.

Giampaolo’s agricultural roots continue to play a role in his thinking and management style. He is known to have embraced a motto advocating “harvest waste” and often invokes farming analogies to press home a point promoting continuous improvement to his disciplined team.

“I used to be a shepherd and you need help to herd sheep,” he reflects. “If you have 2,000 sheep in front of you, with no help – in this case trained dogs – you can’t control them and they wander where they want. I look for honest and hardworking people who enjoy their job and if they make a mistake, they will learn from it.”

Although the Group has not experienced a lot of turnover, the organization is quick to expel hires, who oversell themselves in an interview and underperform once brought on board.  “We move the bad apples out,” Giampaolo says. “You will never turn a donkey into a race horse,” he quipped.

High performing employees who can’t collaborate and work with others are “not leaders but loners,” he argues. “We want team players. Competitors try to steal our people, but they don’t leave so we must be doing something right.”

One key reason employees are reluctant to leave is the support they receive from management. “Combined, the two of us together are smarter than one acting alone,” Giampaolo reasons. “In some cases, we see a problem or opportunity the same way, other times we disagree,” he acknowledged. “But, once a decision is made, there is no second guessing. We commit to supporting our employee teams for the success of their action plans.”

Shaping the future
Growth and succession planning are constantly on Giampaolo’s mind. “I have plans 50 years ahead calling for a new generation of family and leadership to build this organization into a $10- to $20-billion company.”

By ensuring roles based on capability, he fully expects coming generations of his extended family and professional management to grow the Giampaolo Group, be stewards of the environment and give back to the community. The team is fully aware of the mission and steep challenge he has set for them and the need for a well-orchestrated succession to ensure success.

“We are striving for an ‘earnings culture’ based on continuous improvement in everything we do by eliminating waste,” Giampaolo said. “We believe that if we can’t measure something, we can’t improve it. Our entire workforce seeks to mitigate losses in manpower, method, machinery, material, measurement and environment. “

Giampaolo sees most lost time injuries, near misses and – heaven forbid – fatalities as rooted in man/method issues, where workers are unable or unwilling to adhere to safety standards or are either unaware or outright disregard potential hazards in their work environment.

Evaluating the group of companies as a whole, Giampaolo is concerned with leadership building, performance-based compensation strategies and succession planning. To that end, the Giampaolo Group operates an internal ‘University’ attended by new hires, who work through a full year program during which they cycle through and are exposed to all aspects of the company.

Although some students bail when they find themselves shivering outside a retail scrap yard in the cold January weather, many complete the rotation and become solid employees with promising career paths in and across any of the Divisions.

Transitioning through all aspects of the business not only rounds out a new employee but affords management a chance to recognize each employee’s leadership potential and whether his or her talents are best applied in operations or sales.

“We spend a lot of time and energy working people through the program and those who make it are amazing,” Giampaolo commented. “You can see what motivates them. You see their eyes light up when they go to work. We have had huge success getting them to learn the business.

“Experience and education-based skill sets get prospective employees in the door for an interview,” he added. “But, it is their cultural fit that gets them hired and lays the groundwork for a successful career.”

Joe Caruso, the Group’s chief executive officer, who sat in on the interview with AMM, attributes Giampaolo’s ability to size up people to shrewd listening skills.

“Watch how he treats people,” Caruso said, lamenting that listening skills are underappreciated today. “Mike is good at listening rather than sitting and waiting to interject his thoughts while the other person is talking.  He listens so he can really understand.”

Surrounded by a strong management team, Giampaolo’s role has evolved over the years into what might be called chief troubleshooter. Hands on, he has been known to surprise employees by jumping in and taking charge on the plant floor.

He has worked every job at the company along the way, Caruso noted. The CEO laughed when pointing out how Giampaolo – when taking a casual walk through a facility – spotted something out of place.  “He literally jumped on a forklift to move it,” Caruso recalled.

Aluminum vs. steel?
Although ferrous accounts for 80-percent of Triple M’s shipments, Giampaolo’s heart belongs to aluminum. “Why do I love aluminum?” he asks. “Because it is the metal of the future. Aluminum is lightweight and 100-percent recyclable. It’s got everything.

“My friends in the steel industry are doing a good job fighting back hard with impressive new steels in the automotive battleground, but can they move fast enough against the CAFÉ and air emissions legislations?” he asked. “Some say the trend is a trap. That is why we do our homework first.”

Making a habit of prioritizing his homework, Giampaolo recognized early in his career that scrap supply alone was not a long-term, viable plan for growth. With more and more industrial scrap generators going direct, he recognized the need to add value and insure the company remained relevant.

“To go one step above, I came up with the idea to make aluminum billets,” he says.

Being vertically integrated in the aluminum space allows the company to directly consume the scrap it purchases. “We don’t want to leave money on the table, so we not only trade aluminum scrap but add value by converting it and producing a product,” Giampaolo explained. “Producing billet allowed us to diversify into a value-added downstream business where I felt there was a shortage of cost-effective, competitive and market responsive cast houses and that a solution would be welcomed by the marketplace.”

Being vertically integrated in the aluminum space allows the company to directly consume the scrap it purchases. “We don’t want to leave money on the table, so we not only trade aluminum scrap but add value by converting it and producing a product,” Giampaolo explained. “Producing billet allowed us to diversify into a value-added downstream business where I felt there was a shortage of cost-effective, competitive and market responsive cast houses and that a solution would be welcomed by the marketplace.”

No stranger to the scrap industry’s reputation for unethical practices, Giampaolo and his businesses have thrived despite not being able to compete for some accounts.

“It can be hard to build trust as we all get painted with the same brush,” he acknowledged. “And it is very difficult to initially demonstrate we are different. It is a slow, frustrating process at times but if you treat people fairly, you can compete.”

Customers first
Keeping customers’ needs front and center is key to maintaining relationships. “We avoid the commoditization trap for our products and services by having the customer’s needs at the core of our strategy,” Giampaolo emphasized. “Customers expect service, delivery, and cost savings innovation, all at the lowest total cost of ownership,” he added. “If we are the best in those areas and can add value to the commodities that we collect, transform and market, success will follow.”

In addition to commodity prices for metal, the organization keeps a keen eye on currency fluctuations and consumer spending, both of which it considers signals of the direction metal-intensive industries, such as automotive and construction, are headed.

Excepting his initial ill-fated foray into the scrap business, Giampaolo’s brushes with failure have been few and far between. He has, however, experienced his share of close calls, which have served as learning experiences. “There were many bumps,’ he acknowledged.

“In 2008, I went to sleep and woke up to find 200 containers rejected in the water,” he recalled, referring to the meltdown in global metals. The plunge torpedoed the price of shredded scrap, sending it from $600 ton to $125 a ton in 45 days. And reverberated across the metals supply chain.

“We didn’t know if we were going to make it and realized we had to take some drastic moves,” Giampaolo recalled. “We reduced costs everywhere we could and laid off 165 people, something we had never done previously. We were proactive with our banking partner and told them what we were doing. When things get rough, you have to swim faster,” he summarized.

“That whole experience made us stronger,” Giampaolo contends. “And our export customers never again got metal with 10-percent down. It is cash up front now.

“Every business has failures along the way,” he reasoned. “What is important is learning from your mistakes and not making the same mistake twice. I treat failures as a life lesson, not a life sentence.”

Capitalizing on those lessons, Giampaolo has also notched success in the real estate business, where he has developed both residential and industrial sites. The property now occupied by the Group’s Brampton headquarters and nearby Matalco facility were once little more than an open field.

Even so, metals remain his top priority. “I never considered doing just real estate. I would go crazy,” he volunteered. “It is just too slow paced.”

Giampaolo’s relentless appetite for rapid, forward motion has led to more than his share of sleepless nights, which, in an ironic twist, he actually welcomes. “Those moments of being awake at night are not due to significant concerns about our business,” he pointed out. “Instead, they are spent trying to connect the dots, to encourage and support our leadership to evolve the next big thing for our group of companies.

With a proud legacy grounded in recycled metals and value-added products derived from them and a new generation eager to learn and further transform a good business into a great one, the Giampaolo Group of Companies track record for doing things right and dedication to continuous improvement promises to pay dividends for years to come.