Misalignment of star markets plunged its regional revenue into a free-fall in the wake of the recession, but Southfield, Mich.-based contractor Barton Malow Co. has soared back on the strength of a better business model and organizational blueprint.
Regional revenue in each of the last three years has rocketed from $109 million to $424 million to $619 million, establishing the firm as Michigan's largest builder. But all this success came only after management "hit the reset button," says Ryan Maibach, president of the firm. "If I had to point to a single initiative that's made a difference, it would be the time we spent during the downturn deciding what we wanted to accomplish as a culture."
At the time, early in the recession, the firm was undergoing culture shock, the result of uncharted business conditions. "The downturn hit Michigan three to four years prior to elsewhere," recalls Alex Ivanikiw, a senior vice president at Barton Malow who focuses on business development. For a while, the cyclical highs of some markets offset the cyclical lows of others, in accordance with the firm's business model. Then, in 2008, "for the first time, our markets were in parallel with one another," Ivanikiw says.
All were flat-lining. Detroit's Big Three were the first to go and, with them, a sector that has sustained the firm for generations. Then, in rapid succession, energy, arenas, health care and education followed suit.
"All at once, four major projects either were canceled or pushed so far to the back of the shelf we knew we couldn't count on them," Ivanikiw says. "It's tempting to completely pull out of a market like health care when it's dying, given the costs to stay in it, but we realized those costs paled in comparison to the 30 to 40 years we'd spent investing in it."
Rather than retreat, the firm has spent the past three years investing in another business: community building. "We brought in a consultant—a clinical psychologist—to work with senior management teams, officers and project teams to better focus on the human dynamic involved in operating a business," says Maibach. Later, the consultant was named director of organizational and leadership development.
The move marked a sea change for a firm best known for its technical acumen and ability to execute on projects of extreme complexity, including Michigan State University's (MSU) Eli and Edythe Broad Art Museum in East Lansing, a structural tour de force many deemed unbuildable (ENR Midwest 11/18/13 p. MW12).
A pioneer of building information modeling, 4D scheduling and 5D estimating, the firm relished the challenge of tackling "one-offs," such as MSU's Facility for Rare Isotope Beams (FRIB), a 12-year undertaking involving 3,000 workers, 40,000 cu yd of concrete and 2,700 tons of steel. As one of Michigan's largest employers of trade labor, Barton Malow deployed small armies to pour concrete, install equipment and perform interiors work, even if it wasn't always as adept at cultivating "soft skills," says Maibach.
"Three years ago, we would have received high marks for technical competency—how to lay masonry or pull a wire—but the challenge was how to better engage our work force, how to develop intangibles such as emotional intelligence within a very metrics-driven profession," he says.
A more collaborative approach has proven key. Down have come the silos—some 24 business units in all—replaced by a trio of units defined solely by region: central, eastern and southeastern. "If you're going to silo yourself into 24 business units, you might as well be operating 24 separate businesses," says Chuck Binkowski, a senior vice president who oversees the central region, including operations in Southfield, Chicago and Columbus, Ohio. "We realized our greatest strength is the diversity of our business and our greatest asset [is] our people. You need market experts but also an environment that allows people to step out, plug in and support and learn from one another, whatever their expertise."