Rod McDaniel, President & CEO, S3 Recycling Solutions

In an interview with Invest:, Rod McDaniel, president and CEO of S3 Recycling Solutions, discussed how the company is scaling through acquisitions, strengthening community impact, and leveraging technology to innovate in a traditionally blue-collar industry. “It starts with trust,” he said.

What developments over the past year have shaped S3’s growth strategy and its approach to serving clients?
We’re in an interesting time right now. Historically, most of our client base has been in healthcare, and that sector is facing some challenges in certain areas. There’s also the broader political climate, which is affecting some of the regional hospitals we serve.

What I tell our team is that a crisis can create opportunity. So, we’ve been looking at ways to diversify — not only our customer base but also our revenue streams. Situations like this push us to think outside the box. Some of the ideas we’re exploring now have come up before, but because we were doing well, we didn’t prioritize them. Now we’re moving with urgency to implement those ideas.

We also just rolled out a global ERP system across the company, which we believe will make our operations significantly more efficient.

What opportunities and challenges come with operating in a fragmented industry like electronics recycling?
Our industry is extremely fragmented. We completed our first acquisition last July, and that experience really opened my eyes to what that fragmentation looks like. We’re talking about a space filled with a lot of small companies , where there’s very little structure. That can be a challenge, but I see it as an opportunity.

I’ve always been an optimist. To me, this is a chance for someone to step up and help define what leadership looks like in our space. There isn’t yet a clear divide between good and bad players, so there’s room to create the playbook.

From the customer standpoint, because the industry has such blue-collar roots, we’ve worked hard to bring in some white-collar professionalism. Many of our clients are white-collar organizations, so presenting ourselves in a way that aligns with their expectations has made a big difference.

Often, we’re perceived as just the “junk man,” but in reality, we’re helping clients reach important environmental goals and ensuring data security. There’s still a strong blue-collar element, since most of our workforce is in manufacturing and warehousing, but combining that with a professional, client-facing approach has been key to our success.

How does S3 align secure data destruction with environmental sustainability?
A lot of people forget that we’re more than just a junk company. We handle sensitive data, and that’s a critical part of what we do. We operate out of over 200,000 square feet of space, and there’s a good chance that, at some point, data from a major organization has come through one of our facilities.

This isn’t a casual job. It’s serious work. We have armed guards and metal detectors for employees, and the entire process is designed to protect our clients’ brands and the people they serve.

On the environmental side, companies are increasingly looking to meet sustainability goals, and that’s where we come in. Our business model includes refurbishing devices to give them a second life. That means fewer new devices have to be manufactured, which has a positive environmental impact.

There’s also a social benefit. A healthcare provider might retire a laptop after two or three years. We can refurbish it and resell it at a much lower price, making technology more accessible.

And we go a step further. Part of our model includes donating devices to charity. I grew up in public housing in Nashville, and a donated laptop changed my life. Now we get to do that for others. It ties into the ESG framework: environmental, social, and governance. We’re touching all three.

What lessons have you learned about scaling a business in a highly regulated industry?
This is a very regulated space. And while the industry is fragmented, major clients won’t work with anyone who isn’t certified. So if a company wants to scale, those certifications are essential.

We learned a lot through our first acquisition. No matter how much research is done beforehand, there’s always more to uncover once you’re inside. That experience helped us start building a playbook, which includes a checklist for what to look for and what questions to ask next time.

Sometimes it’s about obvious things, like realizing the company doesn’t have an alarm system, and sometimes it’s about deeper cultural misfits. Culture is extremely important to us.

Looking back, we probably should have embedded someone from our team in the acquired company for six months to really transfer the culture. That would’ve helped build trust faster.

One thing we did get right was being present. The day the wire transfer went through, I was outside the building and walked straight in. I spent that entire week there. But a longer-term presence would have made the transition even smoother.

How does S3 plan to grow while staying true to its values and community focus?

One of our core values is community, and to me, that means people. That includes our employees, our clients, and our broader network of stakeholders, like community boards. When thinking about the future, growth just isn’t possible without the support of those groups.

It starts with trust. People need to really understand who I am and who S3 is at the core. As we grow, the goal isn’t just growth for growth’s sake. We want to make sure we’re still making an impact and not losing sight of our identity.

We’re a business, so profitability matters, but we also have to live by our values. We’re planning to acquire at least one company each year for the next five years. That kind of growth means we have to tighten up our internal processes, which is why we’ve focused so much on our ERP system. Now, everyone is on the same platform, seeing the same data and communicating more effectively.

What role does technology and team development play in S3’s long-term strategy?
From a business development perspective, we’re building a team of professionals who really have a heart to serve. We want our client service representatives to not only deliver great service but also to show the full value of what S3 does, including our impact in the community.

Culture is one of our biggest differentiators. If we lose that along the way, we lose a key part of what makes us successful.

We’re also leaning into our identity as a tech company. We recently brought on a new CTO, and he’s incredibly sharp. I have a tech background myself, but he takes it to another level. We’re exploring how to use AI and computer vision to process materials faster.

Most CEOs in this space don’t come from a tech background, which gives us a unique opportunity to lead with innovation.