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Generational Business: Growth on the horizon for Sault energy company

More than 70 years and three generations later, McDougall Energy is still going strong

Ask Darren McDougall about the blueprint behind his family’s successful 72-year-old business and his answer comes down to one simple concept: a unified company culture.

Precarious leadership and in-family squabbles have marked the downfall of many a family venture, yet through its seven decades, McDougall Energy has avoided those pitfalls, becoming a major distributor and marketer of heating oil, propane, gasoline, diesel fuel and commercial lubricants, operating in multiple markets across Canada.

McDougall, who serves as company president, said that’s because of a tried-and-true guiding principle that avoids nepotism and instead rewards skill and experience.

“Everyone in the company, including family, has a role, and that role is defined by a skill set and nothing else, really,” he said.

“I’m extremely fortunate that I have a great working relationship with both my siblings, Chris and Jennifer,” he added. “They don’t want my job and I don’t want their job, so that’s half the battle in a family business.”

Chris is the company’s vice-president of supply and distribution, while Jennifer is the director of human resources.

Together, the trio leads the Sault Ste. Marie-headquartered company that was founded in 1949 by their grandfather, Allan McDougall.

Back then, Allan and his wife, Lucy, ran the enterprise out of their home in Thessalon, east of the Sault; Allan serving as the regional Esso agent and Lucy doing office work from their basement.

After Allan retired in 1972, his son, Bryan, and daughter-in-law, Joy, took the helm, growing the business by consolidating operations across Northern Ontario.

Darren and his siblings took over in 1998, further steering the company through a number of mergers and acquisitions as part of a greater strategy for continued expansion.

Over the last two decades, McDougall has moved into commercial fuels, lubricants, and propane, and entered the truck stop, retail gasoline, and aviation sectors.

The business has also widened its catchment area. It currently has operations in Ontario, British Columbia, Alberta and Saskatchewan and will make its first foray into Manitoba in 2021.

Since 2011, it's consistently been acknowledged as one of Canada's Best Managed Companies, reaching Platinum status through the Deloitte-led recognition program in 2018.

“There’s been a lot of change, and that change has been very necessary,” McDougall said. “They were very conscious choices… and I don’t think we would be in existence today if we hadn’t made those choices and evolved over time like any business needs to.”

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For the grandchildren of McDougall Energy’s founder, their ascension to a shared leadership role was a natural progression from their earliest days growing up around the business, McDougall said.

Though they each maintained outside interests and hobbies, their joint goal remained to carry on the family tradition.

Some of their most valuable lessons came from learning on the job.

“There’s no textbook and not necessarily a roadmap for you to refer to, so you have to make real-life decisions that impact people – customers and employees and other stakeholders,” said McDougall, who completed a two-year business program at Sault College before jumping on board.

“There’s no experience like being on the job, that’s for sure.”

As a privately held business, they aim to take a long-term approach to decision-making, McDougall said.

Yet, even the most meticulous planning couldn’t prepare the company for the onset of the COVID-19 pandemic, whose impact was felt as travel came to standstill and fuel purchases dropped.

But crisis brings focus, McDougall said, and the company’s primary aim was to ensure the safety of employees. Those who could work from home did, and most have still not returned to the office.

That approach has paid off, as there have been no illnesses related to COVID-19 throughout the company.

“It really shows the resilience of so many companies,” he said. “A company that can have resilience, and take a conservative approach to make sure that they were protecting their people at all costs, will come out on the other end stronger, whenever that is.”

Though McDougall Energy’s highlights over 72 years in business are many, McDougall said the successful transition to the current generation of family ownership remains his most gratifying achievement.

The company has maintained its headquarters in Northern Ontario, where it continues to create jobs for northerners alongside its steady expansion to other corners of the country.

It’s a legacy of which the three siblings, and their forebears, can be proud.

“It’s very rare that a business can transition one generation, let alone two, and continue to prosper,” McDougall said.

“The last 20 years has been the majority of our growth in the business, so that transition is probably one of the biggest milestones that we’ve had, and we’re going to continue to grow our business.”

This article is one in a series focused on the rich histories, journeys and long-term successes of generational businesses in Northern Ontario.