Ed. Note: This is the first in a two-part series covering this session.
In an interactive discussion at Ward and Smith’s annual Construction Conference, two leading industry executives shared hard-won insights into the strategies and procedures on the job site and in the office that have facilitated the success of their companies.
During the panel, President and CEO of Cooper Tacia, provided guidance on key factors that will shape the future of the construction industry, along with ideas for adapting business operations to economic trends.
The discussion was moderated by Hank Harris, Director of Consulting for Ward and Smith Business Consulting. As a high-level advisor to leaders, founders and CEOs, Harris draws from his extensive experience in management consulting and investment banking. Specializing in the strategic architecture of closely held firms, he develops family business solutions that create a legacy spanning generations.
T.A. Loving is consistently ranked among the nation’s top 400 contractors. The company provides complete pre-construction and construction services for a variety of industries. Ty Edmondson is a registered Professional Engineer and a licensed general contractor. A graduate of NC State University, Edmondson started his career with T.A. Loving as a summer intern and has been with the company for over 35 years.
Cooper Tacia was founded in 2003 and provides . The firm leverages the talents of a team of engineers, general contractors, project managers, and skilled tradesmen to design and build commercial and industrial facilities, as well as government and education buildings. John Cooper has been an entrepreneur since the 1990s, bringing decades of construction experience and a builder’s mindset to the company’s growth. What began with residential developments and local commercial projects, including some of Raleigh’s favorite restaurants, has evolved into a multi-state construction firm delivering biofuel plants, government facilities, schools, offices, and other large-scale commercial and industrial buildings. Under John’s leadership, Cooper Tacia has expanded operations across nine states, established an Atlanta office, and grown to .
Along with creative ideas for recruitment and retention, including how to attract senior-level talent, Cooper and Edmondson provided their take on:
- Risk Management and Evaluating Subcontractors
- Future Challenges and Growth Opportunities
- The Impact of AI
- Advice for Young Professionals
Harris initiated the discussion by asking Cooper and Edmondson for an overview of their backgrounds and how they got into the construction industry. “When I was at NC State I needed a summer job…that’s when I started with TA Loving and Company,” said Edmondson. “I absolutely loved it from that point, and I was majoring in civil engineering, so it worked well together.”
“First of all, I am very honored that I was asked to come and speak. My path into construction was simple, I grew up poor,” mentioned Cooper. “My father was a trim carpenter, and all my uncles were framers, so the only way I knew to make money as a kid was working with Dad. From the time I was 10, I was remodeling kitchens, building bathrooms, things like that.”
Adapt and Survive
Harris: “What are you seeing right now that makes you feel optimistic?”
Cooper explained that he maintains a positive outlook on the industry due to its evolving opportunities for growth: “Construction always presents a new path. Our industry allows us to adapt and survive, and for people who are willing to roll up their sleeves and work harder, there’s always a new way to grow and succeed. The diversity of opportunities keeps me positive.”
“There’s not a lot of room for pessimism in our business,” laughed Edmondson. “That’s because it’s a hard business, and you have to be optimistic the projects will continue. But it’s just incredible to think about the growth that our state is experiencing and the work we’re doing right now.”
Harris mentioned the landscape in Raleigh is virtually unrecognizable compared to when he initially moved there in 1985: “The growth that everyone said was coming seemed like it was just a theory, but it has certainly proven to be accurate. On the flip side, is there anything you’re seeing right now that is giving you cause for concern?”
“Complacency can be difficult to avoid after living through such a strong, up-trending market like we’ve had for the last five years or so,” noted Edmondson. “There’s a tendency to think that things will continue. This is when it becomes even more important to prepare for difficult times.”
Cooper echoed the sentiment, stating that, “It is vital to fortify your balance sheet such that it is above the level you need it to be. Hope for the best, but plan for hard times. It’s also important to diversify, not just beyond your geographic area, but also beyond your typical scope of work.”
Risk Management and Mitigation
Starting out, Cooper thought delinquent payments from customers represented one of the foremost risks to his livelihood. As his business evolved through the years, however, he realized that the financial strength of his partners posed a more significant risk.
“We created a risk mitigation department, which is just a fancy way to say that we vet our people a lot better than we used to,” said Cooper. “We found that if they get in trouble, it easily gets you in trouble.”
“Getting a bond doesn’t solve this problem,” commented Harris.
“No, it does not,” Cooper responded. “Like the saying goes, you can’t get blood out of a turnip, so it doesn’t do you any good to sue someone that doesn’t have any money. You can bond your subs but it doesn’t just magically pay if something goes wrong. You still have to go through the lawsuit, and it can get very expensive, not only because of the capital you have to put into it, but also because of the negativity it brings into the room. It sucks the life out of you, at the office and at home. You also don’t want it to affect your leadership or your workforce.”
Insurance is also essential for risk mitigation, but like any tool, its effectiveness is only determined by the extent of its use. “Insurance is not a product that you can just buy and forget about. A few years ago, my colleague implemented a subcontractor default form for T.A. Loving that has helped us better manage our subs and ensure they’re financially sound. As you buy those products, use those products,” advised Edmondson. “They need to make your company better and be able to operate from a higher place.”
Self-performing work is viewed as a means of expansion and a way to control the schedule. “We think about it because it comes along anyway,” joked Edmondson.
“We probably self-perform around 15 percent of what we do,” Cooper explained. “Our company is more of a construction manager. When we do self-perform, we view it more as a way to control the schedule, and we spread that around where we think it’s most useful.”
Disruptors and Blind Spots
Anticipating a new threat, disruptor blind spot in the industry is a difficult, if not impossible, exercise; however, it is a critical strategy for success. “Funding, permitting, or basically anything that relies on the government to provide something can be a disruptor, because it can move at a glacial pace,” explained Edmondson.
The uncertainty surrounding the conversation around forever chemicals represents a significant risk factor. “Since we do water and wastewater filtration work, we initially viewed it as a great opportunity,” said Edmondson, “however, if the government decides to designate it as toxic waste, and we dig it up and move it somewhere, we’re responsible for it, so the risk is substantial.”
Cooper mentioned that the nuances associated with contract review and negotiations pose a significant risk to any business operating in the construction industry. “A lot of companies don’t take the time to educate their leaders. Everyone has good intentions, but many companies have managers who are working in a very broad area,” added Cooper.
In the interest of saving time and/or money for the company, a manager may decide not to have one of their colleagues review a change order or a small contract. “This is an example of how a small oversight creates risk exposure, and how investing in training pays dividends. We have a highly structured training program for our managers which helps to solve problems like this, with the additional benefit that it helps to build culture and a more engaged workforce,” noted Cooper.
Ed. Note: Part two will address AI, advice to the next generation, and questions from the audience.
