After all, it’s all about the people with whom you work.
THIS ARTICLE WAS PUBLISHED IN THE ‘Q’ – THE REGISTRY’S PRINT PUBLICATION – IN JANUARY 2014[dropcap]I[/dropcap]n an era when changing employers is the norm, Swinerton CEO Jeff Hoopes is a titan of longevity. He’s been with the company since 1984, when he started as a project engineer. In taking over as CEO this past September, he became only the 11th person to hold that job in Swinerton’s 125-year history. As a member of the executive team, Hoopes oversaw Swinerton’s expansion throughout California and into Oregon, Washington, Texas and Hawaii, and he led business development efforts that helped the company surpass a significant milestone of $2 billion in annual revenue. The company is a diversified builder in commercial real estate, government, hospitality, healthcare, critical facilities and education, to name a few. In the Bay Area, the company is recognized as one of its most significant construction and building organizations with a varied portfolio that includes the de Young Museum, Williams-Sonoma Union Square and the headquarters of Gap Inc.
Swinerton is 100 percent employee owned. It still holds California contractor’s license No. 92, obtained when the state first began issuing licenses in 1927.
Q: The Bay Area is in a boom economy, and it is a very good time for the construction industry. What challenges does this environment bring for your organization?
JH: The largest impact to our organization has come from the lack of manpower availability at the subcontractor level. On the larger corporate campuses it’s difficult to run multiple shifts or expedite schedules because of the limited amount of manpower in the community.
[contextly_sidebar id=”abd603242c498b9636248c7dc56c0a07″]Q: If that’s so, how do you maintain quality?
JH: We have been successful in maintaining quality on our projects by bringing our subcontractor base into the early planning and design process for each project. We are delivering the majority of our projects through a limited design-build process that includes design of the structure, curtain wall, mechanical, plumbing and electrical. Because almost 70 percent of the project cost is design-build, we can hand-select our subcontractor base early and thus ensure a quality project.
Q: Is the region’s booming economy going to create more competition from other builders who want to come into our region?
JH: The San Francisco Bay Area has several barriers to entry, including an existing base of very talented local builders, a limited subcontractor base that prefers to work with the local builders, and a very active union base that makes it difficult for nonunion contractors to enter the market. A few contractors will enter the market during this boom period but will have to offer very low pricing to be considered for projects. When the boom cycle has run its course and these outside contractors realize their losses from taking on too cheap of work, they will likely leave town. It’s pretty much the normal cycle.
Q: The construction industry for the most part has been a local industry. Do you foresee a period of consolidation regionally or even nationally?
JH: I see a future consolidation on a national basis allowing large construction corporations to enter some restricted markets. The majority of the consolidation on a national basis has come from offshore construction companies or large publically traded US companies. Examples of this consolidation are purchases such as Webcor by Obiashi, Howard S. Wright by Balfour Beatty, and Rudolph and Sletten by the Perini Corporation. These are just a few of many examples.
Q: Campuses and office space for tech companies are becoming individualized playgrounds. How is Swinerton responding to the changing environment in the technology space?
JH: We are currently building several million square feet of space in the technology sector. All of our work at this point is sustainable, green and environmentally sensitive, with the real differentiator in this technology space being the additional power and cooling requirements and collaborative space such as bike repair shops, kitchens, interface space and resting rooms. It’s all about the collaborative space rather than the workstation.
Q: Are you optimistic about 2014? Why?
JH: 2014 is shaping up to be a great year. We’re seeing good projects with qualified, experienced and talented clients.
Q: Where do you see the greatest potential for your industry in the near term (product wise, healthcare, multifamily, office…)?
JH: The greatest potential for our industry in the near term is focused on the project delivery process rather than the market served. The construction process is very archaic and needs to be upgraded and streamlined with the use of Building Information Modeling tools and lean technologies.
Q: You joined Swinerton nearly 30 years ago as a project engineer and probably held almost every job at the organization. What excites you about Swinerton today, and how will that help you focus on your goals ahead?
JH: There are two key elements that have kept me here at Swinerton for 30 years, and they are the same reasons why I am so excited about the future. The first is because I enjoy the people I work with. Everything else is secondary in employee satisfaction. It’s all about the people you work with. A bigger question might be, “Why does Swinerton attract the type of people that we do?” I think it’s because of the culture and differentiator that exists and is fostered here at Swinerton. That culture exudes from our value of employee ownership, in which we succeed together. No one person’s ego will become greater than that of the whole of Swinerton; our future is tied together both financially and emotionally.
The second element is our focus on new technologies through the use of BIM, which allows us to better control the outcome of the projects along with our risk profile. I see that in the next five years the contractor’s role in the project delivery process will be changing into more of a leadership role through different forms of design-build and design-build finance opportunities.
Q: Your company just marked its 125th anniversary. You have quite a legacy to uphold for this organization. Can you please tell us about the values that Swinerton has maintained during this time and how those will be carried into the future?
JH: In my 30 years with Swinerton, I’ve worked with five chairmen, more than 15 executive vice presidents, numerous leaders, and over 1,000 employee-owners. As you might imagine, there’s been a great deal of variety in styles and effectiveness. But looking across the entire spectrum, I believe there are two characteristics that nearly all of them, and certainly those who were most successful, have shared. One is an ability to adapt philosophies and strategies without compromising Swinerton’s values and who we are at our core. The other is an understanding that individual success can only result from team success; it’s not about star players, but star teams.
These may seem simple on the surface, but take a step back and consider what’s really involved in achieving both ideas—a willingness to change, a willingness to sacrifice and a willingness to elevate others. Not easy tasks, but necessary ones to survive and thrive over the next 125 years.
Photos by Laura Kudritzki