When looking for ways to grow a construction business, no idea is a bad idea. Construction Executive
profiles five construction company owners who are adopting unique and creative business development plans—even in a recession—and are succeeding at boosting employee morale, helping the community and staying innovative.
Turman Commercial Painters, Livermore, Calif.
These days, the construction industry is riddled with fear and bad news. That’s why Dave Theobald, president and CEO of Turman Commercial Painters
, Livermore, Calif., decided it was time to do something positive for his employees and reverse the negative thinking that gets in the way of business development.
His model is people-centered: Give to employees and clients, and they will give back to your business.
Through a local mentorship group, Theobald learned of Danny Cottrell, a pharmacy owner in a small town in Alabama who decided to give each of his employees a personal “stimulus package” in the form of envelopes stuffed with $2 bills.
The only catch was that the $2 bills needed to be spent at locally owned shops and restaurants—pumping a little bit of money into the community while giving a boost to employee morale.
Theobald was inspired by the story. His painting company, with 35 years of experience in corporate re-branding, tenant improvements, multifamily, retail, hospitality and restoration work, had an especially good year in 2008, and he wanted to keep the positive momentum going. With the go-ahead from his business partners in California, Oregon and Washington, Turman Commercial Painters committed $30,000 in stimulus money for its employees—a modest investment to help overcome the economic doom and gloom.
In May, he surprised more than 200 field and office employees with envelopes filled with $50—the first $10,000 installment. Employees received additional stimulus payments in June and August.
“We’ve been blessed with good business and good people, and we’d had our best year to date,” Theobald says. “With a lot of employees experiencing fear in our market, I was trying to show our folks, ‘we’re okay,’ and that we were willing to go above and beyond what we might normally do.”
Included in the envelopes was a call to invite other local businesses to pay it forward and create their own stimulus plans. The notecards are turning up at shops and restaurants throughout the region. The initiative, which Theobald named the People’s Stimulus Package, has encouraged nearly 50 organizations nationwide to donate more than $115,000 to employees. (For more information, visit www.peoplesstimulus.org
So how did Turman Commercial Painters manage to thrive last year amid the threat of the downturn? First, having a strong backlog helped. When those bigger projects dried up, the company went after smaller projects that were easier to land.
In addition, Theobald called all hands on deck to reach out to new clients. It would take more than a small group of salespeople to stay ahead, so he requested that his HR and finance staff devote 25 percent of their time to help with business development efforts, even if it meant calling their friends and families for sales leads.
“Sales is really just building relationships,” Theobald says. “And if you just ask, people will choose to get involved.” The company holds 15-minute daily sales meetings to discuss the leads and decide which ones to pursue.
The most important thing, he says, is not to get sucked into the psychological downturn.
“The People’s Stimulus Package was really just about trying to turn that fear into a little more hope.”
Faith Technologies, Menasha, Wis.
Sometimes a new name is what it takes to re-brand a company and establish a foothold in new markets. Faith Technologies
, a merger between SKC Electric based in Kansas and Town and Country Electric based in Wisconsin, debuted under its new name in 2002 as an employee-owned, full-service electrical and specialty systems contractor.
Today, with more than 1,500 employees at 15 divisions in six states, the company has grown from its Midwestern roots by investing in employee learning and lean construction practices.
“Faith really empowers its employees,” says Mike Jansen, executive vice president, Kansas City division. “We have a real focus on training our employees, both in trade-related training and leadership training. Every employee within Faith has a career path, and we provide them with ways to succeed within the organization.”
This year, the company followed the lead of many Fortune 1000 companies and created a position for a chief learning officer (CLO) who oversees the company’s in-house Learning and Development (L&D) Department.
The department manages programs for developing corporate managers and field employees, as well as the company’s wellness and safety initiatives. It’s also working to incorporate lean manufacturing principles throughout Faith’s design and construction processes.
Lean construction, a relative newcomer to the construction industry, is a system pioneered by the manufacturing industry to eliminate waste, including overproduction, excess processing, defects and underutilized workers.
Using these methods, the company is breaking through barriers to learning while enhancing employee productivity.
Having the L&D Department in-house, rather than outsourced, has been a huge benefit, Jansen says. “We know it adds value, and we’re always trying to add value for our employees and customers.”
The company is leveraging its customer relationships to perform work at U.S. military bases from coast to coast, while targeting federal work for the U.S. Postal Service and the Social Security Administration.
In addition, the company is performing work for previous clients like Kraft Foods, Ocean Spray Cranberries and Hill’s Pet Nutrition. It also is building the electrical systems for the minor league Tulsa Drillers stadium in Oklahoma.
“Even though we are getting work, there is not a lot of margin in that work,” Jansen says. “So there is an extreme focus on being productive on our jobsites.”
How did Faith Technologies sell the new “lean” strategy to employees?
It was as simple as a personal, face-to-face approach. The company launched a 100 Jobsites in 100 Days program in which Faith visited jobsites and posed the question: “If the company puts its resources toward growing the business in this economy, can we rely on you to do everything in your power to be productive and keep this job profitable?”
Across the board, the answer was “yes.”
Heidler Roofing, York, Pa.
Heidler Roofing Company
has come a long way since starting out of a garage and basement at the home of Joseph Heidler, Sr., in York, Pa., in 1959.
The Heidler family, joined by a team of skilled professional colleagues, has worked diligently to build Heidler Roofing into a full-service roofing contractor serving the five-state region of Pennsylvania, Maryland, Delaware, Virginia, West Virginia, and Washington, D.C.
Its business philosophy—exceptional work at an exceptional price—shines through on all levels. One business development strategy echoes again and again: never forget the importance of customer relationships.
“We’ve developed strong relationships, and they’ve helped us through times like these,” says Mike Heidler, president. “In the past 50 years, we’ve developed a lot of customers that deal with us almost exclusively for their roofing needs.”
The company’s craftsmanship shows in several institutional and public projects, including its showpiece renovation of the Baltimore Basilica, the nation’s largest Catholic diocese.
Keeping expert technicians and mechanics on the payroll allows the company to handle everything from thermoplastic roof membranes to copper roof restorations and custom architectural metalwork. Building on this expertise, the company also became licensed to install most major manufacturers’ roofing systems.
“We try to stay in good standing with these manufacturers so that if they are ever called by a potential client, our name pops up early in the conversation,” Heidler says. “It shows that we can be relied on to build the job with the warranty the manufacturer offers.”
Heidler Roofing is in the beginning stages of establishing a formal training program to help retain and promote its best workers. Even though the company, like most, has been forced to work at lower profit margins, Heidler is doing his best to keep everyone busy to prevent layoffs.
“We’ve been taking more work to keep our people busy. We feel that they are good people and we want to keep them,” he says.
In other words, Heidler knows his talented craftsmen are what keep the phone ringing. And when the economy bounces back, they will be the key to future business development.
SDV Construction, Inc., AlbuquerqueSDV Construction, Inc.
, short for Service-Disabled Veterans Construction, is a prime example of a company that knows how to master a niche market.
Kirk McWethy, a mechanical engineer and a war veteran, started the company with a business partner in 2005 to take advantage of the federal government’s set-aside program for small companies employing workers who are disabled as a result of U.S. military service.
At first, very few companies qualified for the program, and the government’s support waned. So McWethy came up with a new business model to become a medium-sized design-build contractor. He went after post-Katrina rebuilding work on the Gulf Coast, picked up some jobs for the U.S. Navy, and grew the company’s market share in heavy civil and federal work.
How did SDV grow from a $1 million company to a $6 million company? Partnerships.
First, the contractor teamed up with local architects to get its foot in the door. In addition, it targeted large government owners, including Kirkland Air Force Base, Sandia National Laboratories and the U.S. Army Corps of
Engineers. Then, it made the company known by networking with industry groups like Associated Builders and Contractors (ABC) and the Society of Military Engineers. And of course, it maintained a sharp eye on employee safety and training.
Recently, SDV signed a protégé agreement with Los Alamos National Laboratories—a partnership that will help the company market its design-build services and grow to the $10 million to $15 million level.
It’s also going after work in remote areas that doesn’t appeal to most contractors, such as water treatment plants in northwestern New Mexico.
“We’ve used that as a way to jumpstart the company,” McWethy says. “These communities needed a contractor to do this kind of work, and we were able to be successful with these remote projects.”
He found his workers didn’t mind working out in the middle of nowhere—it was quiet, and they could focus on getting the job done.
SDV also participates in some high-profile projects; for example, it built the livestock barns for the Living Desert Zoo & Gardens State Park in Carlsbad, N.M.
Half of the company’s employees are war veterans, and McWethy believes this is a competitive advantage.
“Vets come very motivated and very oriented to getting the job done,” he says. “They’re flexible and bring a lot of innovative ideas to the jobsite.”
As a result of its commitment to safety and training, SDV hasn’t had a single safety-related incident since the company was founded, and it received ABC’s Safety Training and Evaluation Process (STEP) Platinum safety award in 2008.
In addition, SDV recently was nominated to receive the American Subcontractors Association’s general contractor of the year award.
KM Stemler Co. Inc., New Albany, Ind.
KM Stemler Co., Inc
.’s company motto is “Pride in Performance.” Based on its growth since its founding in 1981, the company certainly can be proud of its performance during nearly 30 years in business as a general contractor.
“I want individuals to have the same pride in the product we produce,” President and CEO Kerry Stemler says. “In hard times, it’s even more necessary to have pride in your work.”
The company has gone from being a small start-up to a multimillion dollar commercial and industrial contractor, as well as a property leasing and development firm. It self-performs work in several different trades by keeping steel erectors, carpenters, steel stud framers and licensed electricians on the payroll.
“The fact that we are an open shop contractor affords us the ability to cross train and enables us to tap into different segments of the industry,” Stemler says.
One of the company’s core business development strategies is diversification. “Stretching beyond your comfort zone is the key to getting through this economy,” Stemler says. But, he cautions, “Growth in volume is not the answer. Growth in profitability is the objective.”
In other words, he believes in choosing the right project at the right time, without overleveraging the company. Going after a mix of smaller projects in the southern Indiana-Louisville, Ky., market—and maintaining relationships with banks and local economic development groups—has kept the company in the black.
The key to being profitable is developing creative solutions to clients’ needs, even if it means changing the game plan due to mitigating factors, Stemler says.
For example, when his client Good Will BridgePoint Services was confronted with escalating costs during its capital campaign to build a brand new facility, the company stepped in to recommend rebuilding the non-profit’s existing facility at about 30 percent of the cost. The client rethought its objectives, gave money back to the local donators, and waited it out. In the end, despite the delay, the donors came back on board, the project came to fruition and the client achieved its goal.
“We have to look at being more service-oriented than we’ve ever been before, and that means going back to the basics and thinking more like a businessman,” Stemler says.
In a tough economy, it also has meant streamlining staff to keep only the greatest performers and eliminating overtime allowances.
“Focus on your best employees. You may have five tough employees but 90 good ones—focus on the 90 good ones. This allows you to take the good ones and make them greater,” he says. “I’ve told my employees this year, ‘I need to make decisions so that the majority of us can survive.’”
Change is frightening, and strong leadership is essential to instilling confidence in employees that the company will survive the economic downturn and grow in the future.
“I have no doubt in my mind that we will come through this stronger,” Stemler says.