Successful construction CEO’s and senior leadership teams are constantly striving to take their companies to “the next level.” The best teams have a clear vision of what that next level is, often expressed in terms of specific measureable, time-dated goals. Some even set “Big Hairy Audacious Goals”, BHAGs, as articulated by Jim Collins in his seminal work, Built to Last. Typically these BHAGs are set for a longer horizon, perhaps three to five years out, and require bold strategies that involve significant organizational development and change to achieve. The achievement of these certainly takes the organization to “the next level”, perhaps even transforming the company.In a cyclical industry like commercial construction, a critical requirement for setting growth goals is favorable market direction and dynamics. It is difficult to grow a construction company serving a single geographic market that has negative direction. However, with the market direction and dynamics we face in Houston for the foreseeable three to five years,
Energized by the hiring of Executive Director, Chuck Gremillion, the Construction Career Collaborative (C3) Board and Committee Chairs met on February 6, 2014 at Marek Brothers Systems to establish their strategic goals for 2014. Gremillion, a highly-respected industry leader who had run the A&E Graphic Complex, his family’s business until it was sold, came on board on February 1, 2014. He took over from Katrina Kersch, a loaned Marek executive.The group established three specific goals:
March 06, 2014
“This is Joe.” That is the way Joe Vaughn answered the phone, whether it was a customer, a captain or a carpenter calling. Joe, who founded Vaughn Construction, died January 16, 2014 at age 70. He was as genuine and authentic a man as you will ever know. Big and imposing, blunt and straightforward, smart and decisive and, above all, caring and witty, were his hallmarks. He was the epitome of a construction man, the absolute “best of breed” of builders.Joe was from the field and for the field. He had started in the industry at age 12 and served as a carpenter, ironworker, laborer, engineer and superintendent, before becoming an operations manager and ultimately an owner/CEO. He created a builders’ culture at Vaughn. He respected field craftsman and revered field superintendents. The Vaughn lobby is full of candid pictures of superintendents in action at their jobsites. And at his service in the St Thomas High School Assembly Hall, converted to a chapel to handle the huge crowd, it was poignant, moving and so fitting, that his casket was carried in by six superintendents in their Vaughn field shirts. He was their hero and they were his.
February 20, 2014
Editor’s note: The following condensed version of Kiley Advisors 2014 Forecast was written by Pat Kiley and Candace Hernandez, co-founders of Kiley Advisors, LLC, and is published here with their permission.Looking BackHouston was a major job creator once more in 2013, adding 86,000 new jobs.Houston again had population growth of approximately 125,000 people.There was positive absorption in all major commercial market segments (office, light industrial, retail and multifamily) again, with the vacancy rate for Class A office space remaining well under 10%. Rental rates continued to increase in all segments as well. Single family new home contracts increased by 20+ percent; spec houses were selling at custom prices.
February 04, 2014
The “war for talent” is certainly a reality for Houston based construction firms, whether they are general or specialty contractors. Firms are hiring again at an ever accelerating pace and people with experience are in great demand. So firms are after the best “talent” and are making increasingly lucrative offers to lure them away from their current employers. It is happening at every level too, from craft worker to senior executive. And, in our judgment, with the robust market for both commercial and industrial construction, it has “only just begun!”This battle for the right people is further intensified by players from outside our construction world. The energy companies are looking for the same type person as our craft workers and engineers. This has become exacerbated with the wonderful (for Houston and Texas) shale gas boom. Shale drilling is much more labor intensive than the traditional methods of finding oil; consequently, these energy companies are raising the stakes for the high school graduate with some technical aptitude, that young person good with their head and hands. They also want the college graduates with engineering degrees, as do many other industries. So we have real tough competition from big, powerful and prosperous companies.
July 11, 2013
Editor’s note: The following condensed version of Kiley Advisors 2013 Forecast was written by Pat Kiley and Candace Hernandez, co-founders of Kiley Advisors, LLC, and is published here with their permission.Looking BackWe totally recovered all jobs lost in the downturn and added another 95,000.We experienced net positive absorption in all major market segments: office, industrial, retail and multifamily. Vacancy rates are now under 10% for all these segments.Houston returned as a preferred market for real estate investment.The new contract awards for non-residential construction in the 10 County Greater Houston Primary Metropolitan Statistical Area (MSA) rose to an estimated $3.9 billion, still far from the peak of 2008, but, none-the-less, a healthy increase.Best of all, the entire industry was feeling a sense of surge: Developers and Real Estate Professionals, Architects and Engineers, General and Specialty Contractors. Smiles became more prevalent as activity levels increased.
February 11, 2013
It was great to read in the Houston Chronicle recently that The Hermann Park Conservancy will dedicate a 290 Foot Suspension Bike Bridge named in honor of Bill Coats, a conservancy founder and a highly respected construction attorney. The bridge will connect the existing park area to 90 new acres that will be developed into hiking and biking trails and, over time, a dog park will be added as well. Coats, who died in May 2010, was a founding partner of the Coats Rose Law Firm and for over 30 years the lawyer for the Houston Chapter, Associated General Contractors of America, Inc.
November 19, 2012
History and Hope: Fifty Years Later C3 Gets It RightEditor’s note: In parts one through three of this series, Pat Kiley’s article Construction Craftwork as a Career has listed the state of the commercial construction craft workforce, given an account of the history of the industry over the past fifty years, and talked about the reasons for the rise and fall of union versus open shops. He concludes with the view that the industry can regain esteem for crafts worker careers through a new approach which combines the best of the union and open shop systems.There is one other factor that has brought us to the state of the industry, described in the first part of this series. It is, to me, the most regrettable thing that has happened, especially as we look forward. Raw labor costs have become a real element of the way this market now competes. Leave aside the lack of benefits and training – many companies pay as little as possible because of the abundant supply of immigrant labor. And, unscrupulous contractors are skirting the basic employment laws governing overtime and withholding taxes, even minimum wage. What is even more concerning is that, in this ridiculously competitive fee environment, more owners and general contractors are using these lowball bidders, so they are thriving while many who play fair – who meet the minimum legal requirements – struggle.
November 05, 2012
History and Hope: Union versus Open ShopEditor’s note: In parts one and two of this series, Pat Kiley’s article Construction Craftwork as a Career has listed the “brutal facts” of the current state of the commercial construction craft workforce and given an account of the history of the industry over the past fifty years from his personal perspective. His series continues with an explanation of the decline of union shops with the rise of open shops in the Houston area.Three things really sounded the death knell for the unions. The first happened in 1980. The National Building Trades Unions President, Robert Georgine, lead a successful effort to amend the 1976 ERISA (Employee Retirement Income Security Act) Laws and got the union pension funds, (into which contractors were contributing a defined, negotiated hourly contribution per covered worker), declared as “Defined Benefit Pension Plans.”
October 30, 2012
History and Hope: The Past Fifty YearsEditor’s note: In part one of this series last week, Pat Kiley’s article Construction Craftwork as a Career began as he listed the “brutal facts” of the current state of the commercial construction craft workforce and the industry’s inability to recruit and retain the number of skilled workers needed both now and in the future. Part one ended with his asking two questions:Two questions arise: How did an industry full of very smart people get into this precarious position with its most vital resource? And, even more importantly, how do we regain control and have the workforce we will need to build all the structures Houston will require in the coming years? Let’s take the first question and travel back about 50 years. Let me tell a brief personal story.I arrived in Houston in 1962. On my second day here I played golf at the historic Memorial Park Golf Course. I was paired with a man and his nephew, a young man fresh out of the military. This veteran was highly jubilant because he had just been accepted into the Carpenters Union Apprenticeship Program, and his father was not even a member – his uncle was. I learned from his non-stop chatter that his good luck was rare. Most often you needed to be “born into the union” – your dad had to have been a craftsman if you wanted to become an apprentice.
October 22, 2012
