Real Estate and Construction
Rebuilding a business
How Andrew A. Fimiano drove change through Southland Industries to increase profits
By Brooke Bates
Smart Business | November 2009
Page 1 of 5
Ultimately, it was Andrew A. Fimiano’s discomfort that led to a transformational decision. The president and CEO of Southland Industries was squirming after enduring 45 minutes of relentless questioning from business consultant and “Good to Great” author Jim Collins.
Fimiano went to Collins in 2002 for advice on improving his mechanical engineering, construction and service firm. Although he’d grown revenue from about $10 million when he came on board in 1982 to $323 million in fiscal 2001, the company was starting to lose financial traction.
Collins’ interrogation revealed that Southland was splitting its focus across two business models. It lost 22 percent of its profit doing traditional “plan and spec” work, which involves bidding to build another firm’s design and charging customers for adjustments to those designs during construction. The company relied on “design-build” projects — designing and constructing its own plans at a set price — to make up for the loss.
Collins’ final question led to Fimiano’s revelation: Why would you keep offering a service that eats up nearly a quarter of your profit, causes the bulk of your legal problems, fosters customer dissatisfaction and burns out your employees?
Fimiano didn’t have an answer, so he knew change was crucial. He vowed to make the company 100 percent design-build in the next three years.
“Until you really look at the metrics, until you really look at it the way Jim Collins looked at it and the way we started to look at it, you think you’re doing OK. The overall company’s making money. One component of it isn’t, but it’s OK,” Fimiano says. “It caused us to really focus on what we did best rather than just being OK.”
This new direction wasn’t just a change for the 1,750 Southland employees but for the entire marketplace, as well. Fimiano knew it would take relentless effort to convince employees and customers alike that OK wasn’t good enough.
“We were always good,” he says. “But how do we get to the next level? How do we become really great?”
