Craig Kirkpatrick half expected the call that March day in 1996. Even
before he picked up the phone, he knew why Dick Powers, the dean of Hiram
College, was calling. This time, it wasn’t for a temporary solution to
a perpetual problem.
As part of the $5.6 million contract Hammond had been awarded to construct
Hiram’s new library a year earlier, the project architect instructed
Hammond’s roofing contractor to use a simulated slate material
manufactured by Supradur; it was a product Hammond was unfamiliar with. Six
months after construction was completed in July ’95, some of the tiles
were blown off the roof during heavy winds. Hairline cracks snaked through
the shingles. And each time workers walked the roof to inspect and repair
the damage, the brittle material snapped underfoot.
After vigilant research, Kirkpatrick — at that time vice president of
Hammond — discovered the cause of the erosion. The roofing material
had been defective. But in trying to contact Supradur to ask the company to
honor its material warranty, Kirkpatrick learned it had gone out of
business. Although the deteriorating roof was Supradur’s fault,
Kirkpatrick proposed a permanent solution to Powers: Hammond would replace
the roof for Hiram with a different product. And Hammond absorbed the cost.
Kirkpatrick’s partner, Vic Gramoy Jr. — Hammond’s president
— says it was simply a matter of “the buck stops here.”
After all, theirs is a business based — and built on — risk, and
they had gambled using a product with which they had never worked.
“That’s just part of the risk involved in this business,”
Gramoy says. “In the 25 years our company’s been in existence,
every time we bid a project, we say, ‘We’ve got to roll the
dice’ and that’s what we do. It’s a priced job and if you
miss something, you don’t get it back. Even if you do the best job
possible, sometimes things happen that aren’t your fault. But we still
take the responsibility and stand behind the work because we want to be
called back when that customer builds another building.”
That philosophy brings Hammond substantial repeat business from clients
such as J & L Specialty Steel Inc., The Timken Co., Republic Engineered
Steels, Morton Salt and others. Licensed as a full-phase general contractor
in Ohio, Pennsylvania, Indiana and West Virginia, Hammond performs between
$30 and $40 million a year in sales. During the past five years, the annual
average has comprised $8.5 million in industrial construction and $30
million in commercial construction jobs throughout the United States.
Originally established as Hammond Acoustical Co., in 1973 the name was
changed to Hammond Interior Systems and the forte became interior finishes
— dry wall, metal stud, acoustic ceilings and ceramic tile. Today, the
business has branched into two separate companies: Hammond Construction
Inc., which performs general contracting and construction management work,
and Hammond Industrial Inc., an industrial contractor.
Gramoy Jr. is president of Hammond Industrial and secretary/treasurer of
Hammond Construction. Kirkpatrick, who joined Hammond in 1981 as a project
manager, took over as president of Hammond Construction in 1998 and serves
as secretary/treasurer of Hammond Industrial.
Formerly located on Belden Avenue in Canton, Hammond moved its offices to
Park Avenue S.W. in 1980. The company also acquired a four acre lot on
Kimball Road in 1987, with a 10,000-square-foot office, storage and
maintenance building for its cranes, trucks, compressors, lifts, welders
and service vehicles.
Hammond has grown and flourished because its executives have a history of
taking calculated risks to change with the times and meet the needs ofits
customers. “We’ve changed because we’ve been successful at
adapting this business to what the market required,” Kirkpatrick says.
So how does a company prosper for so many years, managing all the risks
involved in so many endeavors?
“Well, I’m not sure risk is manageable,” Gramoy says with a
chuckle. “It’s more what you do to avoid the risk by controlling
it.”
“To control your risk, instead of managing it, you make a controlled
decision to produce what you’ve promised, when you said you
would,” says Kirkpatrick.
Easy to say. Hard to do. Here, Gramoy and Kirkpatrick share an eight-step
plan that’s helped them control risk in a million dollar business and
an inherently risky profession.
1. Rely on the experts. “If we were to tell you we’ve been
successful because we’re smart, that wouldn’t be true. It’s
because we have very good people and they’re absolutely the key to our
success in this business. We’ve built our staff over time and a lot of
them have been with us 10 or 15 years,” Kirkpatrick says.
Gramoy says that Hammond treats its employees — all 125 of them,
including project managers, estimators, engineers, accounting and
administrative support, project superintendents, foremen and tradespeople
— as family.
2. Work as a team. A company commitment to the success of every
project is the driving force behind Hammond’s innovative
“partnering programs” that ally the owner, engineer and
contractor in working together for the owner’s interests. Such a
concept minimizes risks while ensuring quality results.
The teamwork philosophy is one Kirkpatrick and Gramoy illustrate by example
in their daily operations. Although their roles are defined on paper, the
two partners consider themselves equally responsible for the success of
every endeavor. Kirkpatrick says of Gramoy, “We don’t always
agree on everything, but the disagreements haven’t been many. I think
our personalities are fairly similar.”
3. Monitor performance history. “We’re fully computerized
so we can track our costs. Looking at that history, we know where our risk
exists,” Kirkpatrick says. “For example, in our business, a
worker’s wages may change, but the man hours to build something never
do. The cost of blocks may change, but the number of units of blocks you
put in that wall remains the same.”
Simply put, you limit your risks by understanding and monitoring the
performance and cost history applicable to your business. And you have to
determine how to do things faster if a job is driven by something
uncontrollable. (For Hammond, that’s usually the weather).
4. Control your costs. “Another reason you track your costs is
so you know where you are at all times. Customers don’t like when you
come back to them and say ‘It’s going to cost another
$500,000.’ When you control your costs, you can control a lot of the
risk,” Gramoy says.
Without cost control, you don’t make any money. If your project goes
off budget, it’s time to make some changes — quickly. It’s
simply a matter of prioritizing and rearranging.
5. Scout for ways to expand. “We moved into the general
contracting market around 1981 because we had a national customer that
wanted us to do full-phase general contracting work. The projects became
bigger and the dollar volume increased. Then we expanded into a niche
market as an industrial contractor around 1986,” Kirkpatrick says.
“Today, Craig and I look at the future to see where we can expand.
We’re one of the few construction companies that has a marketing
director. He keeps his eye out for what’s going on out there and where
we think we should head,” says Gramoy, referring to Kurt Goodenberger,
who says he’s developed new relationships with area hospitals,
academic facilities and architects.
“The more we can establish a rapport and go after a project as a team,
even though we may not be contractually tied, the better we do,”
Goodenberger says.
6. Be willing to take a risk. “When we expanded into industrial
contracting, that was a big risk for us. There’s a lot of equipment
and manpower you have to have to do that type of work. [It’s] very
capital intensive,” Gramoy says.
“But Vic’s dad saw that as a niche we should aggressively go for.
He knew there was a market there and we needed to capture that. We made a
decision to do it and we moved forward aggressively — within a couple
of months. It turned out to be a very good idea,” says Kirkpatrick.
Timing, too, seemed to be on Hammond’s side, because, within days of
their decision, Gibbons-Grable Co. — their competitor — went out
of business. “Somebody had to take over that work so we decided it
might as well be us,” Gramoy says.
7. Know when to cut your losses. In 1986, Hammond opened a branch
office in Pompano Beach, Fla. “We were doing a lot of work for
Scandinavian Spas in the Miami area and building their health clubs all
over the country. So we opened the Pompano Beach office and started doing
other bid work, too,” Kirkpatrick says.
But the bids became lower and lower, and the balance sheets started
reflecting a loss. A decision had to be made.
“There were a lot of contractors in that area and they didn’t
have the overhead we had when we originally set the company up, so it
became a less successful venture,” Gramoy says.
“We decided we were better off without it,” Kirkpatrick notes.
So the Florida office closed shop in 1990. Part of the risk is knowing when
to walk away.
8. Learn from your mistakes. “Even if you try your best to do a
good job, that doesn’t mean something won’t go wrong. We do make
mistakes because that’s the nature of this business. But we learn from
them and moved forward,” Gramoy says. “You can’t ignore
mistakes — you acknowledge them and correct what you did
wrong.”
“You have to treat people fairly and do the right thing,”
Kirkpatrick adds. “The goal is to be honest and do a quality job.
Fortunately, we both look at it the same. And as long as we keep that
concept, it really works out.”
How to reach: Hammond Industrial Construction (330) 580-2340;
Hammond Construction Inc. (330) 455-7039