Change Management
Open architecture
How Peter Beck refurbished an aging business model to turn The Beck Group into a national powerhouse
By Robyn Davis Sekula
Smart Business Dallas | August 2007
Peter Beck was intimately familiar with the company his grandfather founded when he took the helm in 1991.
The Beck Group, a general contracting firm, had a strong reputation and had done great work to build the team concept of working well with clients. But it had problems — some big ones. Beck,
who had worked at the company since 1978, knew the company
needed to change, and fast.
“There were years when we lost money,” says Beck, managing
director and CEO.
So Beck gathered up the company’s 15 senior leaders for a
retreat, getting as far away from the daily problems of the office as
possible, so the team could really see the big picture.
“We spent a lot of time talking at that meeting about where business was, who our customers were, our type of product and how
to rethink our business model, and how we were going to have to
do things differently,” Beck says.
At that retreat, Beck and his fellow leaders began to identify the
problems. The company needed to diversify its customer base, as 80
percent of its work had come from developers who, because of a
downturn in the economy, were no longer sending the volume of
work the company needed.
They determined the company’s management style was too hierarchical, making it difficult to tap into suggestions and innovative
ideas from the entire spectrum of employees.
Beck says it didn’t match his leadership style, either.
“My style has historically been much more believing in diversity
of thought and sharing responsibility and holding people accountable, and recognizing that at the end of the day, if there is a controversial decision, that decision needs to be made, and typically
by me, but not before listening to what everyone thinks,” Beck
says.
Another looming problem was that several of the company’s construction jobs were taking up much of the company’s time, money
and energy. Some jobs were even wrapped up in litigation.
The company also wasn’t as sophisticated as it could be in its use
of technology, sometimes working up estimates for large-scale
jobs on one sheet or even on the back of an envelope.
So Beck and other company leaders began to figure out how to
change the company to make it one that could capture the business it needed to survive.
Handling litigation
The litigation that The Beck Group was involved in was draining
the company’s resources and sapping its morale, Beck says, so he
wanted to tackle that first. Beck and other senior managers
assigned one person in the company to work on resolving each
specific case, working with attorneys and others involved to figure
out what the central issues were and how they could be solved,
and an emphasis was placed on doing so quickly.
Beck says litigation is draining, both in terms of resources and
money, and should be avoided at almost any cost. Rather than
going to court, he suggests finding other ways to satisfy a customer
who isn’t happy and to fix the problems.
Litigation damages a company’s reputation and burns customers,
and The Beck Group needed repeat business to survive.
“You have to step up and take your medicine like everyone else
and not get crossways with a customer,” Beck says. “Since then,
we’ve had little litigation.”
Increased and more frequent communication between the company and its clients and instituting a Total Quality Management program
have helped the company avoid further litigation. TQM came to The
Beck Group after a customer introduced it to the firm’s senior management. That helped the company identify potential problems early
on, staving off litigation or other costly problems.
The company also instituted a customer rating program in which
every client is invited to rate the company in several categories after
a job is complete. It tracks the ratings by office and by manager. If
company leaders see a score in the 70s or lower, someone from the
organization works with the customer and with the manager to figure out what went wrong and how to do better next time. Beck says
that the company’s average score was 91 percent last year.
Changing hierarchy
Creating an organization that was open to change meant suggestions had to start from the top down. Beck changed all 12
of the senior management positions to managing director titles
and gave each an ownership stake in the company. Clients
always want to deal with an owner, and that allows them to do
so. The ownership distribution also is crucial to the company’s
succession planning.
In the ownership change, The Beck Group purposely avoided
a plan that compensated employees based on how well their
particular division was doing because Beck wants each of
them to think about the good of the company overall, rather
than just the success of their own divisions, and to also help
each other when need be.
“It reinforces the willingness of people to share resources,”
Beck says. “Good people are intrinsically competitive to start
with, if for no other reason than for their self-esteem. ... You
are better off having a team that is devoted to mutual success,
which requires a little bit more consensus and less top-down.
... I remember one year we sourced more work for our Dallas
office from Atlanta than we did from Dallas. That’s the kind of
activity we strive for.”
The company has continued to develop its leadership by
requiring every employee who receives a paycheck to take 40
hours of training annually through its Beck University. It provides internal and external classes in both technical skills and
soft skills. Beyond some required classes, employees are
encouraged to take classes in a variety of disciplines.
“We consider all of that equally important,” Beck says. “Our
future very much rests in their hands.”
Diversification
Beck also knew the company needed to diversify, both in
terms of the kinds of clients it had and in the types of services
it offered. Developers had long been the company’s bread and
butter, providing some 80 percent of the company’s work in the
late 1980s. But that work dried up in the early 1990s as developers faced a downturn in the economy and changes in tax
laws that made their work more difficult.
“Success begets failure sometimes,” Beck says. “You get so good
at doing one thing that you don’t look to do anything else.”
The company needed to find a new source of income. It had
offices throughout the country, and each was given the freedom to pursue the work that was abundant in its own territory. In Florida, there were plenty of opportunities for building
elementary, middle and high schools, so in that state, The Beck
Group went after that business. The company also pursued
corporate business and became less afraid to tackle unusual
projects, such as building the Texas Motor Speedway in Fort
Worth.
The Beck Group had long been a general contractor and
wanted to add architectural services. At first, the company
tried to hire architects, and that simply didn’t work because
the architects felt isolated in the large company. The company
also tried to partner with an architecture firm for some projects, which wasn’t successful either.
In 1999, The Beck Group merged with an architecture firm in
Dallas. Paying close attention to the firm’s culture made that
merger work as The Beck Group’s executives extensively studied how the architecture firm operated before going forward
with the merger.
“We were remarkably alike, culturally,” Beck says. “But there
were a couple of areas in which we were very different. So we
set up teams from both firms to identify ways to overcome
those differences. We worked hard on the social aspects of the
merger.”
Beck chose to create a special studio in which people from
both firms worked together for about three years to get to
know each other. Ultimately, the firm was brought into The
Beck Group’s offices entirely, but that time together helped the
new employees integrate more easily and, ultimately, produce
better, stronger work.
Creating technology
Beck and other senior management also wanted to find ways
to upgrade the company’s technology, at least partially, to help
the company provide more accurate cost estimates for projects.
“I remember distinctly that we had a pretty good argument at
a leadership meeting between those who felt we could pretty
accurately project the cost of a building on the back of an
envelope,” Beck says. “They really strongly believed that.
Some others of us said no way. It may sound like we do. We did
it for many years, but we weren’t nearly as accurate as we’d
like to think we were.”
That discussion prompted Beck to look at other types of
companies and their operations, and to look at how others,
even in vastly different industries, created cost estimates for
projects. Beck looked specifically at car manufacturers and
discovered that creating a prototype for a car is very similar to
creating a building. He also saw other things he liked.
“They were integrated across key disciplines, like design,
engineering and manufacturing,” Beck says. “They were also
teaming with suppliers in ways they had not done before. ... A
number of us looked at a number of technologies out there,
here and in Europe. ... We acquired a license to a program we
thought was applicable, and they sold the technology, and the
applications people came and joined us.”
Beck developed the technology his own firm needed, and
now, through a separate division, is licensing it and selling it to
other general contractors and architecture firms. He expects
to see a return on the company’s investment through selling
the software it developed and by producing better estimates
and models for its clients.
“It’s allowed us to model at a high level, to be able to design,
engineer and price projects at a very early stage and with a
much higher degree of accuracy than we could ever do on
paper or even with a computer,” Beck says.
The initiatives Beck and his team put in place have helped the
company grow to $750 million in revenue in 2006, but the work
isn’t completely done.
As Beck sees it, The Beck Group is still on its journey.
Though the company is profitable and has accomplished many
of its big goals, there is still work to be done. Keeping an eye
out for the latest innovations and how to implement them within the company are keys to continuing the company’s good
work.
“We are still on a journey that will take many years to realize
some of the benefits we’re seeking,” Beck says. “One of our
key strategies is to marry our customers. That customer that
you know the best is going to be the one who is most likely to
innovate with you. No customer wants to innovate with someone new.”
HOW TO REACH: The Beck Group, (214) 303-6200 or www.beckgroup.com
