Not everyone uses ocean waves as a metaphor for the construction process. But then again, not every construction executive has real ocean surfing experience like Eric Horn of Build Group.
Build Group Inc. is an atypical construction firm based in San Francisco—a place where many things are surprisingly possible. The company’s chairman and cofounder, Eric Horn, is taken aback by how, ten years after founding the company with four other partners and about $340,000 in business, the company’s earned revenues in 2017 are projected to be $725 million. Together, Horn and his cofounders are riding a construction wave in California that required a certain degree of mastery to catch.
Horn and his Build Group partners imposed humble beginnings on themselves in 2007. “We paid ourselves $18 an hour to get started,” he says of the original group of five. “We were making just enough to keep our families fed while staying afloat. We also wanted to bring value to our clients from beginning to end while creating a fresh culture for employee growth.”
That meant taking risks early on in a variety of market niches. One early venture was prefabricated bathrooms: whole-room pods that builders could plug into multiresidential projects. The bathroom pods might have been a good idea, but Build Group had the misfortune of entering the market as the Great Recession hit. Fortunately, they were able to switch quickly to other ideas.
“We were able to adapt the prefabricated concept into solar carports and, believe it or not, cable car kiosks,” Horn says. Build Group ultimately created and installed solar arrays over more than twelve thousand parking stalls for public schools, military bases, and hospitals, and the company also installed a couple of cable car kiosks in San Francisco.
As the economy improved, the lending market loosened, and long-term clients started coming back to Build Group. The company has since amassed an impressive por t folio of projects t hat includes commercial office buildings, public works projects, historic renovations, seismic retrofits, data centers, healthcare facilities, educational buildings, residential/mixed use, demolitions, retail, parking garages, restaurants, hotels, and resorts. A large number of these buildings are LEED certified, including hyper-energy-efficient, net-zero commercial spaces.
Horn and his original partners remain intact, and they’ve added three more at the partner level. They also manage 260 salaried staff plus another 200–350 union workers who are actively engaged in projects. In 2015, the firm established operations in southern California, as well.
That kind of growth in a single decade may reflect a strong regional economy, but it wouldn’t last long if Build Group didn’t have smart employment policies. Build Group has extensively deployed the Myers-Briggs and Strength Deployment Inventory tools. “They help our teams be teams. Part of the challenge is that we work with a broad range of age demographics,” Horn says. “Our processes and team building help employees work cohesively through all the stages. We say it’s form, storm, norm, and perform.”
California is a challenging place for employers for a few reasons: a growing economy means more competition for skilled workers, and the San Francisco Bay area is the epicenter of higher wages and living expenses. Luring away workers with higher salaries is commonplace because noncompete clauses are disallowed by the state. Horn says this requires them to offer more than just good pay.
Hands-On Team Leaders
Eric Horn qualifies the success of Build Group is indeed that of a group. The original team of partners—Horn, Ross Edwards, Bob Hopper, Scott Brauninger, and David Williams —has grown to include three more: Ron Yen, Nathan Rundel, and Todd Pennington. The employee-owned company has a flat organizational structure that allows at least one principal to be involved in all projects.
The extras that Build Group employees enjoy include a dogfriendly workspace, a fitness and wellness program that includes prizes (e.g., a trip to Hawaii to the person who works out the most), and a generous benefits package. Diversity is honored and respected. “We have many Spanish-speaking workers,” Horn says. “Our safety managers are all bilingual.”
Build Group also has what Horn calls a cool culture, where doors are open and employees are encouraged to walk into any office to ask questions and offer ideas. “We give our people a lot of freedom and the responsibility that goes along with it,” he says. “We hold them accountable.”
Recently, the company hosted a seminar involving twenty women studying construction engineering at California Polytechnic State University in San Luis Obispo. They met with female leaders at Build Group who provided them with real industry perspectives. “Whether it’s a site superintendent, an estimator, or something else, every individual has skills we need,” Horn says. “It doesn’t matter if you’re male or female.”
The company has been cited by the San Francisco Business Times and the Silicon Valley Business Journal as one of California’s best places to work in 2015 and 2016. Build Group has also received accolades for being among the healthiest employers, one of the fastest-growing companies, and in the top four hundred contractors listed by Engineering News-Record magazine.
Build Group is extending that corporate culture to its acquisitions and growth, as well. The company has established two subcontracting firms: Pacific Structures, a structural concrete subsidiary, and Level 5, a metal stud/drywall subsidiary. In late 2016, Build Group purchased San Jose Construction to expand its presences in the South Bay Area.
“Our subcontracting businesses are out competing in the real market and are working for our competitors,” Horn says. “When working for Build Group, our subcontracting businesses can bring real competitive market pricing to our clients. To have the ability to control the project with our own employees, rather than than subcontractors, in an extremely tight labor market is a real tangible benefit to our clients.”
Pacific Structures, in particular, is paramount to Build Groups’ diversification plan. Major infrastructure projects in wastewater treatment, airports, tunnels, and highways will get federal funding in the near future, thereby supplying a consistent pipeline of work. The company can also create a joint venture with other firms to take advantage of the work emerging in this market sector. Horn says that proactive diversification has positioned the company to catch the next wave of success, too.
It’s a similar mentality to the basics of surfing. “When you’re in the ocean and you see the wave coming, you have to position yourself well to ride it,” says Horn. “You have to be in the right spot. The same thing holds true in business. You have the fundamentals, add your own style, ride the wave, and become a winner.”
“More importantly,” he adds, “prepare for the next one coming.”