An enormous white fish glides out from between two rocks inside the gargantuan aquarium that reaches from floor to ceiling and divides Robert Fortney’s office in half.
The 6’9″ president of Fortney & Weygandt Inc. is seated in a nearby chair, watching the fish make its looping orbits around the glass tank as he tries to find the right words to explain why his construction firm has grown so quickly during the past decade.
Fortney is quick to point out that his North Olmsted-based general contracting firm is a business in the field of construction, not the other way around. Ironically, he has never set foot upon a bulldozer. And, despite his towering frame and a deep booming voice that makes him seem like he could make a serious go at a professional wrestling career, the success of F&W is fueled more by brains than brawn.
“My strength is systems and organization,” explains Fortney, who bought out his former partner, Bob Weygandt, in 1982, four years after the firm was founded. “I’m the guy who can fit those two extra glasses in the dishwasher and the extra suitcase in the back of the car.”
More important, Fortney’s embarked on a never-ending search to improve upon existing methods of doing business. And while that is at the core of F&W’s business philosophy, it’s Fortney’s ability to deliver on his vision that drives the company’s fortunes.
In an industry in which most large construction companies work on perhaps a dozen projects a year, F&W is an anomaly. Nearly 75 percent of the firm’s annual revenue is derived from more than 100 unique projects. Combined with rollout work the firm does on a consistent basis for companies including Kmart Corp. and Applebee’s, the number of projects per year tops 1,000.
This ability to handle such incredible volume is another part of Fortney’s blueprint. But he has also spurred growth at his 250-employee company by integrating new technology into an industry in which mountains of paper and handwritten reports from the field are the longstanding norm.
By harnessing the Internet to reduce loads of time-consuming, unwieldy internal paperwork and improve communication with his base of subcontractors, Fortney has set himself apart from his competitors. In fact, he just may be one of the first digital-age construction firms in the nation.
But Fortney doesn’t want to keep all this innovation to himself. He says it’s something others in the industry need to embrace as well. Toward that goal, he’s launched a business to business e-commerce site that will, for a fee, let anyone shrink the nightmarish paper shuffling that has long been viewed as a necessary evil of the bidding process.
And for those old-school naysayers who chuckle at the thought of laptops at a construction site, Fortney intends to have the last laugh. Microsoft Corp. recently tabbed F&W for a case study, an honor the software giant usually reserves for high-profile Fortune 500 companies.
“We got tired of running with the pack and doing what the industry does,” explains Fortney. “We basically said, ‘Screw it, let’s not worry about it.'”
This path-less-trodden mentality appears to be the difference between Fortney and his competitors. Today, F&W is closing in on revenue of $100 million a year. Fortney is sold on the belief that technology will help it grow even more. While other industries charge full force toward the electronic age, the construction industry seems mired in its traditional past.
But like every other step of the journeys he’s traveled, Fortney intends to buck tradition here as well. If there is one person well positioned enough to help the construction industry’s transition to the electronic age, it just may be the no-nonsense, tell-it-like-it-is Fortney. Here’s why.
Ten years ago, Fortney looked around his industry and realized the traditional general contracting business model no longer appealed to him.
At the time, most firms survived off a handful of high-ticket projects, which made competition for landing prized contracts a high-pressure challenge. Rather than fall in with his competitors, Fortney says he believed he could increase revenue by creating a higher quality organization from the inside out.
“We took the corporation and divided it into 200 different parts,” he says. “Our goal became to take each and every one of those parts and improve it on a continuous basis. With every step we take, a secondary byproduct of that is more volume. A tertiary byproduct is more profitability on that volume.”
Creating a culture dependent on constant improvement did not mean that workers were charged with bettering only the facets of business for which they were responsible. Any aspect of the company was fair game for improvement. But that led to another problem.
Fortney discovered that American workers were not especially fond of making suggestions to management. That’s in distinct contrast with foreign competitors. For example, the average Japanese worker turns in 30 to 40 workplace suggestions a year. Fortney says studies show American workers are lucky if they turn in three or four comment cards over the course of an entire lifetime.
The solution: Fortney’s Opportunities For Improvement program — or OFI for short. When a worker makes a viable suggestion, he or she is entered into a quarterly drawing for $1,000. The incentive-laden program helps build employee confidence in making suggestions. Fortney now collects about 500 comment cards a year.
“I believe very strongly that cognizance of a problem eliminates 60 to 70 percent of the problem,” he says. “Just being aware that there is a situation comes very close to eliminating it. We work hard to get our people to suggest opportunities for improvement.
“It doesn’t need to be a $3 million cost saver. It does not need to save 500 hours a year. It can be something extremely simple.”
The walls in the lobby of F&W’s headquarters are decorated with framed pictures and letters of thanks from people with whom the firm has worked over the years.
The photograph collection of churches, restaurants and hotels serves as evidence of the importance and power that relationships hold in the business world. Fortney says these relationships are much too rare in the construction industry.
“If you have a legal problem, you work on relationships,” he says. “It becomes obvious that the person you have the relationship with has your interests at heart and is not trying to make his $100 or $200 an hour. Construction should be the same way.”
F&W forged a long-term relationship with Radio Shack more than a decade ago. Today, Fortney has 50 employees exclusively assigned to the rollout arm of the firm, which makes up a significant portion of the company’s annual revenue.
Rollout, explains Fortney, is the term used to describe a job that’s the same each time, such as building a photo lab in a Kmart. No matter where the store is located, the photo lab is in the same place within the store with the same specifications every time.
This strategy has helped F&W establish long-lasting relationships with Kmart Corp., Applebee’s, CVS, Petland and a number of other high-profile chains, which continuously feed business to F&W.
“The niche that we position ourselves in is that of rollout work where there is a pre-established learning curve,” Fortney says. “Once you learn the curve, you’re immediately more competitive than anybody who doesn’t know it. That way, you can make higher profits.”
And though he declines to talk specifics, Fortney says F&W’s profit margins are “substantially better” than the slim 1 to 2 percent considered standard for the industry. Moreover, the rollout program has helped Fortney forge longstanding business relationships that are not solely dependent upon submitting the lowest bid.
“General contracting is a service industry,” he says. “You won’t change this overnight, but the entire bid process is confrontational. We believe that you work on a negotiated basis. When you do taxes on April 15, you don’t ask three accountants to give you bids.”
Technology has had a major impact on Fortney’s business. His ability to embrace it has aided in the re-engineering of his long-range vision.
But when Fortney asked his base of subcontractors a little more than a year ago to get comfortable with the idea of bidding on F&W projects via a corporate extranet, he was surprised by the response. It seemed that many of them didn’t want to wait a year or two for the technology to be developed.
“We were inundated by people saying, ‘Why do I have to wait when I’m ready now?'” he says. “We were shocked. It was the masses telling Big Brother, ‘Hey, you’re behind. We want it now.'”
The reaction spurred plans for www.fwprojects.com, a password-protected extranet launched last August. The plans and specifications for every F&W project are included on the site. So far, it has been a success, with more than 1,000 registered users and 20,000 hits a week.
Fortney reached the conclusion that such an idea was “way too good” to keep to himself and began work on www.constructionbidding.com, a business-to-business e-commerce initiative that takes the premise of FW Projects and offers it to the industry as a whole. The site, which is in beta testing, has only been around for few months but already receives a few thousand hits a week.
Other start-up Web companies are trying to cash in on the same e-commerce model, but Fortney’s is the only one that is not a purely subscription-based service. In fact, Fortney has borrowed a page from Amazon.com in his jump to the Web, applying for a business method patent on the idea.
“Time is money, and if I can do it faster and cheaper than you can, then I want you to use the same system you’ve always used because I can’t be right,” he says with a sarcastic lilt in his voice. “You must be right and I must be wrong. I don’t mind that.”
The Internet strategies are only a piece of Fortney’s overall plan to use technology to evolve F&W into a more efficient company. The development of a single-entry data system, which is about 70 percent complete, and the use of the firm’s Superview 2000 program are two of the other applications Fortney sees as key components. The latter, a system that instantly e-mails every superintendent memo and report from the field to the proper files at F&W’s North Olmsted headquarters, is the one that spurred Microsoft’s interest in documenting Fortney’s system in action.
“My goal is within five years to have my project managers go out to a work site with a laptop, hold a meeting, and before the meeting is over, have a copy of the minutes in the owner’s file,” he says. “It will be all voice recognition and technology along those lines. That will increase our efficiency to a multiple that most of the industry doesn’t exist on right now.”
There’s little debate about the vast financial opportunities that exist within the construction field. With billions of dollars on the table each year, it’s no wonder the industry is so highly fragmented.
There are no big-time national players, and even the biggest of the big control no more than one-half of 1 percent of market share. Compared with nearly any other industry, construction has yet to meet an age of heavy consolidation.
“Construction is the last vestige of the American economy that is still controlled by the moms and pops,” Fortney says. “Every other company, from medical insurance to automobiles to restaurants to lodging to everything else, has gone to the nationals. The construction industry on the contracting side has not done that, but I see that starting to happen.”
As evidence, he points to First Energy’s recent purchase of several small HVAC firms in anticipation of energy deregulation. But major consolidation is still years away. If and when the industry reaches that bridge, firms will need to work out the logistics of such a huge undertaking.
Fortney believes it is the efficiencies created by the Internet and new software applications like the ones he is currently using that will allow construction companies to become national players.
“If you can actually market and establish some guidelines and procedures, take your technology and use your buying power, you could be an extreme force,” he says.
Even after building F&W from a tiny company pulling in a few million dollars each year to one speeding toward the $100 million milestone, Fortney is not tipping his hand when it comes to whether he expects his firm to play a role in this future.
“When, where, why and how we participate in that is not yet determined,” he says, though he jokingly admits that bit of information and 50 cents will get you a cup of coffee. “I think it definitely requires to be looked at and I think that’s really the important part, realizing it’s there to look at in the first place.” How to reach: Fortney & Weygandt, Inc., (440) 716-4000, www.fw.projects.com
Jim Vickers ([email protected]) is an associate editor at SBN.
