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Prospering in Detroit Through the Recession

Detroit has been the epicenter of the current recession, what many would call a depression. But the Detroit-based Brinker Team Construction Co., MBE, which traditionally derived most of its business from the automotive industry, the one perhaps the hardest hit by the downturn, has continued to prosper.

What’s their secret?

“Teamwork has been the absolute foundation of our success,” says Rodney Prater, vice president. “Certainly during these challen¬ging economic times we come together to identify and reiterate who we are so we can move forward from the strengths of our team as a whole and come out on top.”

As the name of the company indicates, the idea of forming a business as a team was not a concept evolved over a period of time.

It was inherent from the start. Don Miller, COO, who founded the company with Larry Brinker in 1989, explains why. Both had worked for many years for a large contractor, which was based in upper Michigan, that decided to close their Detroit branch. The two partners began working out of their garages.

“Larry grew up in a home with 10 kids, and I grew up in a home with seven,” says Miller. “We recog¬nized that the values and the discipline that hold a family together are also a way to form a business. Either way it’s best to work as a team—either all succeed together or, if there is a failure, all come together to face the challenges together.”

The partners had no real financial reserves so necessarily grew quite slowly. “We had to find jobs in which we could contract for payments in mid-month for payroll because we couldn’t meet our payroll,” Miller says. On the other hand, the partners never borrowed money, and always put back whatever they could into the business. “We were a very small firm for about four years,” says Miller. “We certainly didn’t grow by leaps and bounds, but our growth was pretty steady, and reasonably rapid.”

The company’s first job was for $5,000, but it wasn’t long before the jobs started ranging from $150,000 to $250,000—and then upward.

Some of the really big jobs came after about 10 years. These included Comerica Park, home of the Detroit Tigers and along with Ford Stadium, for the Detroit Lions, along with MGM Casino and two other casinos.

These major projects had the company riding moving toward the recession. But these are not readily repeatable projects because these structures are intended to last many decades. Brinker’s repeatable business was focused on the automotive industry, General Motors, Ford and to a certain extent, Chrysler, but also all of the many other different types of business that supported the auto makers. Therefore, when the big three collapsed, it decimated all of the Brinker team’s secondary suppliers, and, in turn, all of the other businesses that were part of that economy.

Then Things Changed

“About six years ago we started seeing noticing that there were fewer and fewer construction and renovation projects for the automotive companies and their suppliers alike,” Prater recalls. “Our company’s philosophy has always been to stay ahead of the curve, so we spent countless hours watching market trends to try to determine where the next boom in construction would be. These efforts paid off.”

Since automotive-related projects had constituted about 65 percent of Brinker’s business, the company knew it had to come up with something equally viable. It turned out this would be in an area where the company previously had little experience—healthcare.

“Our resume prior to 2003 had only been about a half dozen healthcare projects,” Prater says. “But we were heavily involved in keeping the pulse on where the next wave of work would be, and we agreed it would be healthcare.”

But hadn’t healthcare long been regarded as, well, a sick industry? Prater responds that the data showed things like only so many nurses per capita and not enough hospital space for patients.

“We spent a tremendous amount of time studying hospital logistics,” Prater says. “Hospitals are very different from automotive facilities, which are geared toward the production of products. In this respect hospitals are totally nonproductive. But in terms of hospitals needing to coordinate services, they are 10 times more complicated.”

Hospital requirements are also much more complex in terms of space and activities within that space, compared to standard industrial spaces, Prater continues. There are significant changes needed in one room to the next, from clean rooms to operating rooms to patient rooms to waiting rooms and offices. As well as things like gas or oxygen lines needing to be strategically placed in some areas, and well as certain ceiling systems that need more temperature and climate control than others.

As the result of the Brinker team’s mastering every aspect of healthcare construction as it previously had for automotive, in just a few years the company has become a leader in this sector. One dramatic payoff is that Brinker Team was chosen for one of the largest hospitals under construction, the University of Michigan C.S. Mott Children’s Hospital and Women’s Hospital in Ann Arbor, Mich.

Now into the second year of this three year $26 million project, this 348-bed facility is owned by the University of Michigan. Brinker’s contract is with the Barton Malow Company, a general contractor that provides construction management, design-build, program management, general contracting, technology, and rigging services throughout North America. There will be a 9-story tower for clinic space, and a 12-story tower devoted to inpatient care building with the gross 1.1 million square feet. It is on schedule to open in the fall of 2012.

“This was a major breakthrough for us,” Prater says. “Whereas before automotive was 65 percent of our business and has now dropped to about 20 percent, healthcare is now up to about 65 percent.”

Making It Work

Diversifying into a new field was not a change Brinker made quickly. “As we began to feel some of the implications from the recession, we had to internally sit down and revisit our systems of operations and make some necessary adjustments,” Prater says. “We put a strong emphasis on identifying our staff’s strongest points and really look to see where people have their strongest attributes, then put them into positions where they play to their strengths.”

Previously, the same person was in charge of both estimating and project management.

“We found that the person doing the esti¬mating had a better pulse on the markets and competition,” Prater says. “So we allowed people with those strengths to concentrate on estimating, without being distracted by managerial duties. On the flip side, people more adept at management were freed from es¬timating duties, and were able to better tend to clients’ needs.”

By the same token, Prater says, “We took a hard look at field personnel. Before we had our workers do layouts, framing and hang drywall. But now we’ve really defined their specialties so people do what they’re best at.”

How do workers feel about being channeled into one specific activity as opposed to having a little variety? Prater responds that though the company hires master or journeymen carpenters who have learned a variety of skills, “the reality of it is, that it’s like basketball: Some are best at guard or forward or center, but not as good in other areas. So we took the athletic team approach. We utilize the talent in a way that’s best for the team. The workers understand and appreciate that.”

Prater reports the overall efficiency increase resulting from these changes represents about a 20 percent improvement. The company, in making further adjustments, has laid off about 10 percent of its employees, to its current 135.

“I think other companies have seen even greater layoffs,” Prater says.

Other Ways They Save

In also striving to cut costs and increase efficiency, the Brinker Team has selectively kept pace with state-of-the-art technologies in terms of estimating and management software. The Internet is also a strong tool for managing processes. Many of the company’s managerial tools are Web-based.

Nevertheless, the company has been careful not to let tech¬nology get in the way of personal contact. “We have a select base of clients, and we emphasize person-to-person communications,” says Prater. “We spend a great amount of time understanding the philosophy and commitment of our clients, and we pay attention to detail so we’re always on the same page. For instance, on one of our recent projects in downtown Detroit, we spent and additional eight to 10 hours collectively understanding our client’s commitment so we could coordinate schedules and fast track. All these details were attended to before we started working.”

Of course safety is always mandatory at Brinker. A full time safety director oversees every job site and the weekly safety meetings, and OSHA and other training courses are being implemented. One of the results, Prater says, is that the company’s EMR (experience modification rating) “is one of the best in the region.”

The company also recognizes good safety practices and other achievements. “We are always trying to find ways to boost morale,” Prater says. “We have an open-door policy from office to field. We don’t believe that good ideas necessarily come from the top. We’re always open to new ideas and give credit to the people who provide them. What we mean by team is that every single player contributes. Our new employees often tell us that we provide the best working atmosphere of any company they’ve worked for.”

All of these team efforts have paid off in gross revenues of $28 million last year.

But here’s the really good news: Prater sees the Detroit economy beginning to improve. “Detroit is under a new leadership, and that is brought optimism to the city,” Prater says. “Things are definitely getting better. We’re very optimistic about 2010. It won’t be a record-breaker, but it will be a good, profitable year for us. We’re looking to continue growth.”

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