When Millard Choate was an 8-year-old growing up on a cattle farm outside of Nashville, he and his dad built their family’s home. As he continued to grow, the family developed two cattle farms and built barns and facilities, as well. So from an early age, he knew he wanted to be a construction superintendent because of how much he enjoyed seeing things built.
In 1989, that dream was realized when he started his own company, Choate Construction Co. But the economic landscape at that time was challenging, so he had to really dig in to make the company succeed. As the child of Depression-era parents, frugality and positive outlook had been built deep down inside him at a young age as physical buildings were built up tall around him. These characteristics helped him establish his firm and ultimately grow his business despite the tough times.
So when the most recent recession hit, it may have sent shockwaves through many organizations and forced a lot of them to completely revamp their game plan, but Choate simply relied on his upbringing and experience and was able to take it in stride.
“What we have now is reminiscent of when I started the company in ’89,” the president says. “These times are kind of tempering and testing times, and it’s taken us back to our roots to focus on aggressiveness, focus on searching out all types of different projects, focusing on the core values of the company, which includes our procedures.
“Blocking and tackling is a big focus.”
Additionally, he relied on his upbringing and initial experiences founding the company to help him through.
“It’s a tough time,” Choate says. “It’s like people who went through the Great Depression. It can be tough, but it gives people an opportunity to improve, to sharpen both our individual skills and company skills. These times, due to the declining revenues and fees, force us companies to become more efficient. It promotes efficiency and frugality on a company basis as well as on an individual basis — it inspires people to improve themselves and become more and more of an indispensible component of the firm.”
Taking this approach has helped the company weather the storm when revenue dropped from a peak of $738.9 million in 2007 to $358.6 million in 2009.
“[It’s] just thinking and planning and focusing — focus on your core competencies and what you do best and also leveraging those competencies and the types of projects you’ve done,” Choate says. “I believe that’s really the key to it and just keeping the faith. An old coach one time said, ‘When you’re up against a massive team — I was a lineman — just keep your legs moving and keep your legs turning.’ That was true then and in business today. Just keep on plugging and keep on going. Don’t give up.”
That’s exactly what Choate has done. As a result, revenue climbed last year to $429.8 million. The company also has no debt and is focused on the future.
“We feel very confident,” he says. “Our backlog is higher than it’s been in two years, so we see glimmers of improvement, and we see a few more opportunities picking up, and we get a lot because of our reputation. … I feel positive. Reputation is everything, and that’s what keeps us going, so I feel positive in that regard.”
Here are the principles that Choate used to help him not give up.
Meet client needs
Scrounge. It’s often a negative word, but Choate doesn’t see it as such.
“Beat the bushes. No project too large, no project too small,” he says.
In other words, he’ll chase all sorts of projects instead of limiting himself to just a few types, and he’ll do whatever his client needs. It’s a tough market, and the competition is struggling and making things difficult for him.
“What we struggle with as a contractor is we will, at times, have to compete with firms that are really in tough shape that will price warp at a loss just to generate cash flow,” he says. “We can’t do anything about that. We just have to demonstrate that we have the right numbers.”
Not having any debt also helps assure clients that Choate is a good company to do business with.
“There are firms that are really on the ropes and some clients have concerns — will they be around?” Choate says. “Both clients and subcontractors are very nervous because typically the money flows through the general contractors to the subcontractors, and both the subcontractors and the owners are nervous that the contractor could go defunct and the money would have to be paid twice by the owner or the subcontractor doesn’t get paid. That confidence is a key in all parties.”
In addition to establishing the firm as one that can be trusted, he says he also makes sure to respond when customers — or anyone for that matter — calls.
“Anytime they should communicate or call or whatever, instant response is key,” he says. “They can rely on that. Just doing a great job and making sure that they have the confidence that we are protecting their interests at all times; I preach that over and over to our people. Clients trust us to spend millions of their dollars wisely. That’s a trust that we have to maintain.”
To better do that, you have to know what’s important for your customers.
“You have to understand what your client’s hot buttons are, what his interests are,” Choate says. “It’s not just always revenues. Each client has his own nuances so just customize your approach to that client and make sure you’re taking care of them and promote that you’re looking out for their best interest.
“You talk to them. You sit down with them at the inception of the relationship of the project.”
He has an expectations meeting to talk about what they want to see and includes all the key stakeholders — the architect, engineers and anyone else pertinent to the project — and he’s found clients are very positive and forthcoming in those meetings.
“Sit in a room and just go around the table and say, ‘What do you expect out of this job?’” he says. “Then, ‘What are your hot buttons, and what really bothers you in previous projects?’ You’d be amazed what comes out of that — just communicating and actually talking.”
He also says that not every CEO has to personally be involved with that level of intimacy with the client, because it’s just not feasible, especially the larger your organization grows.
“We have different groups here, but the division manager of that group, I expect to have a personal relationship with every client,” he says. “It boils down to that type of relationship.”
Focus on the positive
Years ago, when Choate’s computer would boot up, a short message used to pop up right before the system started — “Get pumped up!”
“Being enthused and going at it tooth and nail is good advice,” he says. “Going at things with a lot of enthusiasm and energy helps dispel gloom and doom anyway.”
He tries to keep employees motivated in the middle of all the negativity they see in the industry. One way he does that is by updating them on how projects are going. He shows photos and announces any new awards, which gets people excited and instills confidence in them. He also expects his managers to be positive, as well. For example, if the Choate Interior Construction group gets a project, the manager of that arm of the business will get on the intercom and just say one thing — “Wahoo!”
“That’s all he says,” Choate says. “Over time, people know what that means. That’s positive.”
He also tries to recognize people’s individual accomplishments, so if someone becomes LEED certified, he recognizes that person. He also recognizes people for accomplishments in their personal lives when he hears about them. For example, one employee received a national award from the Cystic Fibrosis Foundation, so he called that employee out for the accomplishment in front of everyone.
“It’s not only positive, but it’s two birds with one stone — it lets people know their individual efforts are recognized,” he says.
Choate understands that being positive isn’t the natural reaction for many, and he knows that you can’t control everything in business, but the one thing you can control is the way you look at what’s going on.
“Be thankful,” he says. “Realize what blessings you’ve got. Look at your blessings and appreciate the positive side.”
For example, while his volume may be down significantly, he knows that his business is still much larger than it was 10 years ago, so that gives him something to be thankful for in spite of the tough times. By taking a more positive and thankful outlook like this, it sends a positive message to employees so they can stay more upbeat and sets an example for them, as well.
“It’s good to realize that everything you have is a gift from God, and that’s who you really ought to give credit to in the first place,” he says. “That would help set the stage very quickly.”
Look at data
While Choate maintains a positive outlook in life and in business, another key to success through the recession has been not taking a Pollyanna outlook. You have to balance that positivity with being realistic or people won’t think you understand the situation.
“The other thing is being a realist,” Choate says. “I’ve recognized cycles for many years. The curve can’t always be on an upward trend. The growth rate absolutely can’t continue that unsustained climb. It has to, in some cases, decline. It’s a fact of life.”
By degree, Choate is an economist, so looking at data comes naturally to him, but often it’s something leaders tend to neglect.
“I encourage people to analyze the markets,” he says. “What are the coming trends? What are the needs going to be, not just today but six months to a year from now? Try to anticipate where to deploy your resources to produce the maximum return.”
For example, he says that most people recognize that government work and health care are bright spots right now, and condominiums are a more diminished market. Seeing that, he wouldn’t deploy resources to building condos but would focus on those other areas that will be growing and providing opportunities.
Choate saw his volumes increase every year of his business until two years ago, but because of the realistic outlook he had, it didn’t crush him when they declined. It may have been frustrating, yes, but devastating, no.
“It’s almost like the seasons of the year,” he says. “You may wish it was summer all year long, but you just accept the fact that you have fall and winter, but you have faith it will come back next year.”
How to reach: Choate Construction Co., (678) 892-1200 or www.choateco.com
Millard Choate, founder and president, Choate Construction Co.
Education: Vanderbilt — bachelor’s degree in economics and business with a minor in engineering
What was your first job?
I could go way back. I moved a pile of bricks for a neighbor when I was 5 years old. It took about two weeks, and I got 25 cents for that. My first real job was making concrete pottery and birdbaths and benches for a little company in Nashville, and I worked 40 hours a week — hard, hot work — and I made $40 a week. I was rich.
What’d you learn from that job that still applies?
Being frugal. Handing it well. Keeping a job and just doing the best you can possibly do. Be as productive as you can be. The man and woman who owned the store, those people became great references for me. Reputation is everything. That’s what I learned from it.
What’s the best advice you’ve received?
Trust your intuition and your gut-feel. I haven’t always obeyed that but I wish I had. Your gut-feel generally will often tell you or validate your perception of something or some event. Trust your innate gut feel.
What’s your favorite board game and why?
My family plays a game called Pictionary, and the reason I like it is it forces you to laugh at yourself. You can laugh at yourself and each other. Honestly, it’s taught my children to be able to laugh at themselves. Don’t take yourself too seriously.