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September 2, 2014
It's been five years since Eric Jones took over as president of the Bellevue-based construction company Foushee & Associates.
Soon after starting the job, Jones found himself in one of the worst construction downturns in recent memory, with unemployment in the industry hovering around 30 percent.
“I chose to look at that from the glass-is-half-full perspective because I think a transition of leadership is probably more challenging... if we had done it in 2007 or 2008 when things were peaking,” Jones said.
Jones said making the change during a slow time let Foushee focus more on clients and employees, which allowed the new team to establish itself quicker.
Revenues hit a low in 2010, down about a third from the firm's peak in 2008, but they have come steadily back since then, with yearly increases in the 20 to 25 percent range.
Jones said projects got smaller during the recession, but the firm was able to keep the core group intact. In 2008 there were nine project managers and 18 superintendents, now there are nine project managers and 15 superintendents.
Jones said the business is geared to operate in the $100 million revenue range, which is about where they are now. That model allowed them to go from $155 million to $55 million during the recession without making any significant changes in staff. It also allowed them to be selective with teams and not stretch people too far, he said.
Foushee has 106 employees; about 30 of them work in the office.
Interior work was a big factor in keeping people busy at Foushee during the recession. Jones said tenant improvements went from about a third of revenues to about three-quarters as other work dried up.
“Leases are always expiring and tenants are always moving,” he said.
It wasn't the first time that interior work has helped the company through tough times. Jones said in 2000 the firm was heavily invested in the suburban tech office market. When the dot-com bubble burst, they filled the void with interior work.
Nonprofits have also boosted revenues at the firm, such as the Goodwill Job Training and Education Center in Seattle and TAF space in White Center.
Jones said relationships with architects, brokers and property managers are critical to smoothing out economic cycles. “That has always been a kind of shock absorber,” he said.
One segment Foushee hasn't tried is public work.
Jones said others told him to do public work during the recession, but “we survived and we didn't get into public work.”
Subcontractors have also played a big role.
“Our partners really are subcontractors that we work with,” Jones said. “To remain a builder, we're not going to morph into a construction manager.”
Foushee self-performs about 20 to 30 percent of the work on its projects, mostly carpentry and concrete placement.
“That's important for us because not only does your crew provide an example for the rest of the subcontractors, I think you get a higher degree of quality, you get a higher degree of housekeeping,” Jones said. “Sites are cleaner. Safety becomes a greater focus because you have that many more eyes and ears.”
Foushee works on a variety of private-sector projects such as churches, low-rise office buildings and auto dealerships. It recently finished a Public Storage mini-storage building in South Lake Union.
Jones said demand for mini-storage has been increasing as apartments multiply.
Foushee & Associates was founded in 1977 by Jeff Foushee, who was joined a year later by Loch Anderson. Both men stepped down in 2009 to let Jones take over as president and chief operating officer. Lisa Koch became chief financial officer.
Last year, Robert Guymer, a 24-year veteran of the firm, took over as COO and Jones added CEO to his title.
Jones initially focused on operations when he took over five years ago because he had been a project manager for 16 years and knew the business well.
Jones said the transition really started in 1999, when he began weekly one-on-one meetings with Jeff Foushee.
“One of things he always impressed on me was that revenue is not the key. Profitability is the key,” Jones said. “We would far rather do twice the profit at half the revenue.”
Jones continues to push the value of frugality. He said the firm takes a conservative approach and approaches each new year like it is 2010 again. The company doesn't own mobile cranes, forklifts or other heavy machinery, and that means no equipment yard.
“Growth to us means growing the people that work here, growing their capabilities at every level,” he said.
The company recently started a defined employee development program for that.
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Benjamin Minnick can be reached by email or by phone at (206) 622-8272.