Michael Boro was sitting at his desk just a few days after buying out the construction arm of Four Columns Ltd. from his former partners. He wasn’t at his busiest.
“I’m sitting there, and I’m looking outside my office at my assistant,” recalls Boro, who serves as president of FCL Builders Inc. “I’ve got my new title out there. I’ve got my pencil sharpener and I’m sharpening my pencil. (I’m) sitting there tapping my fingers.
“I look up at Diana and say, ‘Any calls? I’m right here if you need me. If you need lunch I’ll go out and get that, too — whatever else you need.'”
It was an inauspicious start for a company that has quickly become one the fastest-growing general contractors in Illinois in little more than a decade. FCL was created when the owners of the parent company, Four Columns Ltd., departed with the development arm of the enterprise to join CenterPoint Properties, leaving the construction arm to wither.
Former owners Robert Stovall and Mike Mullen wanted the backing of Wall Street, but the construction side of the operation was viewed as “too volatile,” Boro says. Boro had the opportunity to join the new company’s team but chose instead to make a go of the construction firm.
It was an extraordinarily difficult time for the fledgling company. Competitors were slinging more mud than politicians the week before an election. They suggested that the orphaned construction company didn’t have the means to finish projects and would soon be little more than a memory. And nasty talk from competitors wasn’t the only problem; Boro knew the company would never survive if he couldn’t keep his core managers intact.
“I didn’t want to lose any one portion of the company because there was this big unknown then as to who we were going to be,” he said. “A majority of our partners caught the (rumors) that were going on around us, saying the foundation of FCL had been removed, with all the high-end partners moving on to other things. The outsiders looking in said this company’s not going to make it another week, let alone another year.”
The concern was that unless his employees had a stake in the enterprise, they might jump ship.
“Internally, there was some caution as well, these people looking at the CEO, the president, the vice president, and all these other guys jumping ship (to CenterPoint),” Boro says. “I was worried about cherry pickers. So what I tried to do was give partnerships to different facets of our company.”
The strategy worked, and the company’s management remained intact. And eventually, jobs started rolling in.
Boro developed a relationship in those early days with Michael Krasny, founder and former CEO of CDW, a technology products and services company. That relationship resulted in a number of projects for FCL. Even so, Boro had to manage his bonding company as if he were a hesitant new customer.
“Those were in the early days. I remember there was a little bit of smoke and mirrors in getting a bond,” Boro says. “Finally, I convinced our bonding company — after we got the roof on — that we were going to finish the project. We didn’t have any net worth to speak of, and certainly that’s what the bonding company was looking for. I also convinced Mike Krasny to give me another month and I’d get the bond. That ended up working out fine. He had the faith in us to move forward.”
Once safely past the mudslinging and the management worries, Boro turned his attention to other pressing problems.
Creating growth
It would have been easy to understand had Boro chosen to move to the new CenterPoint operation with Stovall and Mullen. He liked and respected them, and still considers the two friends.
“I was a partner back then, albeit minute — and they asked me to come on board at CenterPoint,” Boro says. “I said, ‘There are too many people here’ — superintendents that have been with us 20, 25 years, getting up in age, assistants — at a time in the early ’90s (when) construction companies were not doing a lot of hiring. There would have been too many people that would have been put out of work.
“I was still a young guy, 35 years old at the time, and I thought, ‘You know what? I never had a lot of money,'” he says. “Most of my interest was in these buildings that were sold off. I was written a large check to be able to pay off my other partners; it was not tangible money for me, anyway. I’m more of a bricks-and-mortar guy anyway; I’m not Wall Street.”
While he chose not to tie his future to CenterPoint’s management team, he was hoping the new company would provide his construction company with some early revenue. But he learned quickly that wouldn’t be the case;in CenterPoint chose to buy only existing structures, which left Boro without his hoped-for early projects.
FCL’s newfound focus on construction, though, was appealing to other developers, and when the economy turned positive, the company grew rapidly.
“The next step was taking a smaller company that was doing about $26 million in construction that went up to $80 million a year-and-a-half later,” he says.
It was then that Boro realized he needed to standardize the policies and roles in the company.
“We didn’t (want a) bunch of people that operating on their own little island,” Boro says. “(We wanted) a group that supported each other that you had an internal network between communications, between procedures. When you didn’t have a whole lot of work, you had guys wearing several different hats; when you got larger, you had to start giving people a direction where they had a path that was assigned to them.
“Keeping that organization there was the next biggest hurdle.”
As the company grew, people who did some estimating and selling and sometimes worked as a superintendent were less able to oversee so many activities.
“As we started growing, we had to pull away some of those paths and start assigning individual tasks to people and having the checks and balances,” Boro says. “Even though the growth was going vertical, you could be losing money or losing clientele or opportunities as a result of failures,” he says. “The biggest challenge as the growth started to come about was to make sure we inserted procedures and structures and maintained those.”
Boro also began to worry about safety. Things had changed a great deal in the 25 years he spent learning the industry.
“I remember when I first started the business, they dragged cases of beer up to the roof, which is totally ludicrous,” he says.
As the company got bigger, there were bigger safety concerns, and Boro didn’t want to bring on new people without ensuring he could get the most from the new hirees. Both those issues required formalizing policies and procedure.
A small company can get away with a lax infrastructure, Boro says, but a big company like the one FCL Builders had become no longer could, and new accounting systems and procedures were implemented to keep track of the cost.
Despite all the changes, one thing — the family nature of the company — superceded all other issues. No matter what changes were adopted, Boro insisted that the company remember its employees are more than just workers.
“The main reason,” he says, ” is we wanted to make sure our people went home to their families.”
Remembering that also tempers Boros’ approach to business, and he has learned to deal with the inevitable boom and bust cycles that plague the construction industry.
“In the early ’80s, there was a slowdown in the construction business,” he says. “The early 90s, there was a slowdown in the construction business. The early ’00s, there was a slowdown in the construction business. It’s been a 10-year cycle. I’m not saying I’m going to predict what’s going to happen in 2010; however, the challenge is there.
“I can put so much time and effort and money into people. In the early ’80s, everybody took a 15 percent pay cut. In the early ’90s, we got rid of 40 percent of our work force, including management. In the early ’00s, our bonuses weren’t as good as they used to be. Trying to instill in pe
op
le that this is cyclical and the upturn is going to be there — these people have families to feed, they’ve got lifestyles they are accustomed to — keeping your personnel is a big challenge.”
Boro says the company has been fortunate in that it hasn’t seen a lot of turnover.
“We’ve had guys that have been here even longer than I have,” he says. “Most of the people come because we’re a family-oriented company. Even in times that are tough, we keep our personnel for two reasons — one, you’re banking that the slowdown’s going to be (for a short) period of time, and two, we’ve invested so much money in these people you don’t want to lose them to your competitors because really, they are you’re bread and butter.”
And with that strong employee base, the company has found its niche.
“It’s more stable; our reputation is there, but it’s still a very competitive market,” Boro says. “We understand that relationships may open the door, but it’s service and producing that keeps them open.”
Because of that, he refuses to rest on his laurels.
“We’re in a funny business,” Boro says. “It used to be when our files were an inch thick, you got the deal; now it’s a whole legal box full. We put an incredible amount of time upfront trying to understand the client’s need. A large amount of effort we do for free up front. I’m probably into it a good 90 days before we get paid dollar one.
“My attitude is this; your handshake is your bond. If you do a good job, there’s a better chance of getting paid.”
He says the bottom line is not the only measure of success, and not the only one the company focuses on.
“You can certainly go on one job and make a ton of money by just taking shortcuts, shortchanging (the client),” he says. “The problem is, that would be the only job you do for that customer. The successes are where you see repetitive business.”
And with the company he has built, Boro is likely to see the same client faces over and over again.
HOW TO REACH: FCL Builders (630) 773-0050 or www.fclbuilders.com
