September 10, 2024 • 37 mins
In this episode of the FMI Built-In podcast, Chairman and CEO of Hensel Phelps Construction, Mike Choutka, joins host Scott Winstead to talk about creating a strategic business model to achieve long-term success.
Mike reflects on the strong foundation they've built to fuel Hensel Phelps' 87 years of success and the key ingredients to reach the milestone of 100 years in business, including:
- Developing the next generation of future leaders
- Implementing broad-based employee ownership
- Fostering an enterprise-first mindset
- Embracing the future of technology
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Transcript
Episode Transcript
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(00:00):
Hello and welcome. I'm Scott Winstead, FMI Consulting President. I'm really excited
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to share my conversation with Mike Hoodke with you. Mike is the Chairman and CEO of
Hensel Phelps, which last year eclipsed a $7 billion mark and finished the year at
lucky number 13 on ENR's top 400 contractor list. They're fifth largest in domestic heavy,
fifth largest in transportation, number 17 in telecommunications, and number 19 in domestic
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building and manufacturing. Mike has been with Hensel Phelps for his entire 33-year career,
having joined the firm right after college. He began his career as a field engineer and now
serves as the firm's Chairman and CEO, a role he's held for the last five years. Throughout his
career, Mike has been active in numerous industry associations and serves on several industry boards
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of directors, including ACE Mentoring, Construction Industry Roundtable, also known as CERT,
YPO Gold, AEC Unites, and the National Academy of Construction. For ACE Mentoring, Mike currently
serves as the Co-Chair of the Transformative Partners Committee and will be the Vice Chair of
the Board of Directors for the ACE Mentor Program of America in 2025. He is a board member of the
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Construction Industry Roundtable. He's also the 2025 Chair of Construction Safety Week, and he is
also a founding board member of AEC Unites, which aims to drive equity and inclusion across the
AEC industry. Well, good morning, Mike, and welcome to the show. Thank you so much for being here.
Scott, thank you so much for having me. I'm looking forward to our talk today.
Well, just to go ahead and jump in, Mike, if you would, I'd love to start off with just a thumbnail
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of Hensel Phelps today. Sure, Scott. So I think most people know this, but just as a refresher,
our core business is a national domestic vertical contractor primarily, and we do some work in
infrastructure, water, wastewater, transportation, but primarily we build buildings vertical
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construction, and primarily in the US we've done work internationally, but that's not a big part
of our business. We also have a real estate development arm of our company and a facilities
management group that delivers for our clients as well. And so we believe that we have this soup
to nuts approach where we have the pre-development, we can help our clients on the front end,
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we can help in the development phase and the design phase, we can build the project, and then
we can be there for our clients after the project's complete and serve them in a built environment
and help them operate their facilities. And so it's a great business model. All elements of our
company are thriving right now. It's a great time to be in construction. We've seen unbelievable
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growth the last several years, both geographically and by sector, and we have record revenue,
record backlog, record hiring, record growth in our personnel, and so it's just a really exciting
time. In fact, I was looking at this, we've grown 50% just since 2021. And so it really has been
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amazing to see that. And we've also grown our self-work capabilities. And what's most interesting
about that, first of all, it's a core value of ours, being a builder is a core value of ours.
But our hourly growth rate is actually higher than the rate that we're bringing on salary staff
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right now, which is also pretty high, but we're actually bringing our craft force on at a faster
pace to keep up with demand. And then also we're making significant investment in people and
technology. We've hired key personnel in all of those areas and investing a lot of resources into
how do we create a better experience for our employees and how do we keep up with technology
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and investment and innovation. So that's kind of a thumbnail of where we're at today and it's
exciting times. If you kind of think about what you just shared as the current state,
what does Hensel Phelps look like in your view? Well, I think anytime that you see that kind of
growth, you have to worry about a couple of things. One is are you stretching too thin?
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And do you have your people in positions that they're not prepared for? And so we have a lot of
focus on our training and development right now, making sure that our folks have the necessary
tools and resources and skill sets to execute on our growth. But I also think that you have to
make sure that your culture stays intact, especially as you grow at this rate. And so
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five years from now, I see us really doing a doubling down on our core values, which are ownership,
integrity, builder, diversity, and community. And we will invest heavily into making sure that those
core values are present in everything that we do and really sets the foundation for our future
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growth. So I think it's important to keep that in mind as we continue to think about what does it
look like in five years. So we also have, as I mentioned, a large focus on training and development,
and we have a number of employee experience initiatives that we will continue to roll out and
we will continue to foster really building on our employee-centric culture and the way that we operate
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here. That's everything from how we recruit, how we hire, how we onboard, how we train, how we develop,
how we engage, the benefits we provide, compensation, the whole gamut of soup to nuts of the employee
experience from the first time they hear about Hensel Phelps until the day that they retire.
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And so we have a number of major initiatives that I believe will be deployed in the next five years
that really just take all of that realm around our people to the next level. In addition to that,
five years from now, I think we'll see significant efficiencies in the industry through AI and
innovation and operational excellence. I think leveraging data analytics will be a big part of
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what Hensel Phelps will utilize to make our people more efficient. I also think that we will continue
to make stronger connections with our industry partners, and I think we'll invest more heavily
in the ones that we wholly align with. And so I think it's a perfect opportunity for us as we
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grow our business, but also grow those relationships and make sure that we have alignment with our
partners. And then we're going to double down on those relationships and make sure that we're
providing the absolute best value. And then the other thing that's pretty exciting is we will have
a new corporate office within the next five years. And so we're just in the early stages of design on
that, and we will be moving into that new facility here in a couple years down the road.
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A very exciting time. So my smart-eye question is who's the lucky or unlucky project manager
to drew that short straw? Yeah, I don't know if that's been decided exactly yet. I know we have
some people working on pre-construction right now. I'm sure there's a long list that are lining up
to make sure that they get to work on this project. I would not envy them, but I'm sure that it'll
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be just fine. We'll be pretty easy owners to work for. Clearly people and your commitment to people
is a bit of a through line. So, Hensel Phelps, highly regarded firm in the industry, been around
for a very long time. It's very easy to stagnate. That's clearly not the case. So as you think about,
you know, what is it about how you all do what you do that's made it stick and be successful
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and thrive for such a long period of time? Yeah, it's a great question. You know, this is our 87th
year in business, and we are very focused on what it's going to take to get to 100 years in business.
That's kind of our major milestone coming up. And we have some time, but certainly we understand
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the value of hitting that milestone less than a half a percent of all companies ever make it to 100
years. And so, and it all starts with our people, just like we've been talking about. And our model
is to hire, train, and retain the best builders in the industry. And that's what I think does set
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us apart is we hire people. If they're new or entry level, they go in the field. They start in
the field. Every person starts in the field, and we think that's a foundational aspect of our training
and development program. If they come with experience, I'm sure they've been in the field
at some point, but we definitely want to train and keep builders on the roster. That's what makes us
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really successful. And then, because we're employee owned, you know, our people tend to stick around,
right? We have great tenure. We have a program called the Old Timers Club, which is anybody who's
been with us for five years or more as an old timer. And we do a big celebration every year for
all those new old timers. And then we have celebrations around milestones after five years,
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every five years. And the average tenure of those old timers is 13 years. And so we develop this
executive team that's made up of really lifetime employees. And it's a huge strength for us.
And so, you know, that's just that that drives culture. It drives training. It drives a sense of
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family. All of those elements that we believe are important to that longevity and just creating a
place that people want to be at. And so I would say that that culture piece is really important for
us, part of that secret sauce that you talk about. And there's a famous quote out there by Peter Drucker
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that culture eats strategy for breakfast. And I look at it a little bit beyond that. And I believe
that a culture that develops grit eats strategy talent and experience for breakfast, lunch, and
dinner. And so our people are gritty. They've seen every aspect of this industry. They know what it
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takes to deliver. And they're undeterred in execution. So I believe that that cultural
aspect is really a big part of our secret sauce. And we give our people a ton of autonomy,
authority and responsibility early in their careers. And they thrive on that. That's what
they want. They want to have things that are very meaningful with consequences on the line
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that they're responsible for. And I think that really drives outcomes and they grow pretty fast.
And I would say the other thing that is a part of our our model that is successful is
our people are willing to go where the work is. They're willing to relocate. They're willing to
to kind of use this enterprise first mindset to go where we need them to and what's best for the
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business overall. In fact, I was looking at this the other day. We've had 30 executive level people
move across the country in the past five years. And these are project executive level transfers.
And most of them were for the same level positions. They're lateral moves. And so for people to be
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that dedicated to the success and the outcome of Hensel Phelps as an enterprise over their own
personal situation and their own personal wishes is really a testament to how much grit those
people have and how much that's benefited them in their careers, but also the company overall.
And so I think when we when we engage our people, we give them exciting projects to work on.
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We show them that this is a great place to work. We're hoping that they'll stay for their entire
career. And that's really what we've seen so far. That's great. And certainly proof positives when
you can cite stats like that. I'm reminded of a concept in nature that energy attracts like energy.
So you have a few concept if you put two pendulum clocks on the wall, eventually over time, they'll
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sync up. Right. So like like mine and people tend to seek each other out. So as you talk about the
grit, the greatness of your folks and the lateral moves and the dedication to the company and the
cause, it certainly clearly seems to hang together, you know, and how you all think about constructing
the systems of the business and support of the purpose and the culture. So as far as today,
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you know, the current state, how would you describe the business model? And then how do you,
you know, how have you seen it evolve over time? Well, we've always leaned into people's
entrepreneurial spirit. Right. We have a lot of aggressive, smart people. And they just have this
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passion to explore new opportunities. And that's probably what's pushed us into almost all of
our new market expansion, whether that's geographically like in the Pacific Northwest, we didn't have a
strong presence there until several years ago. Gosh, it's probably been almost nine or 10 now.
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But a group of people out of our NorCal office said, we want a presence in the Pacific Northwest,
we're going to make that a target. A bunch of people moved there, we got some work,
they grew and developed talent around them. And now we have a full blown, you know, regional
office there. Same thing in Nashville, same thing in central Ohio, we have a big project in Columbus
now, and we hadn't had a presence there before. Same thing in Hawaii and Guam. I mean, every one of
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those expansion areas geographically has been because a person or a group of people had a vision
to go conquer a new part of the country. And we let them seize that opportunity. And it's the same
thing in some of the market sectors that we've expanded into water, wastewater, mission critical,
advanced manufacturing, even aerospace, which we've been in since the late 90s, theme parks. I mean,
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all of these segments that we've been involved with has been because people pushed us into those
spaces. And we've kind of fostered that entrepreneurial spirit and let people kind of run with that.
And then given them the Hemsil Phelps way, the platform underneath of them with our processes
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and procedures and risk assessment tools, and the way that we think about business, it really is
the best of both worlds. And that's probably what's helped us evolve the most over time.
And I think, you know, you asked the question, how do I see it evolving in the future?
And it's already evolved, you know, since kind of the basic model that we've had for a really long
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time, in the way that it's evolved is that we've brought in a lot of subject matter experts and
specific expertise in certain areas where we just don't have homegrown expertise. We brought in a
CPO, a CIO. We brought somebody in as a Chief Administrative Officer, a Director of Data
Services and Analytics, cybersecurity professionals. I mean, we've brought in the elements that we
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can't homegrow and coupled that with longer term employees and the culture that we've created over
87 years. And I think that's really where the future will be is that blend is how do we bring in the
experts to backfill the areas where we know we need support and also continue to grow our people
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from the ground up and fostering that mindset of seizing opportunities. So that's how I see it
evolving and it already has kind of shifted that way. It's been exciting too. Very exciting and very
intentional around people. You know, Mike, it's always fascinating to me to really step back and
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analyze these large companies and you all have $7 billion and growing and the fact that you've
gotten there just in the last few years. You see some firms that are that size or larger that have
40 or 50 offices. There's a lot of sprawl and if you really look closely, it's 40 or 50 different
general contractors that roll up to a P&L. Then there's that have a much smaller footprint in
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terms of physical presence where it is a business and a business model and it's sort of the branded
house versus house of brands philosophy. As you look at Hensel Phelps, number of offices,
typical project size, kind of how does that play into how you all have constructed the infrastructure?
Yeah, our growth has really been organic. I mean, we've made two acquisitions,
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one in 1987 and one in 2021. And they've been very important strategic acquisitions,
but that hasn't really been our model. Our model has been strategic growth organically.
And I believe it really all starts with 100% enterprise first mindset from our people. I mean,
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that's how they think they're willing to share resources, they're willing to give up
key personnel to go support another part of the business. Our hiring is now enterprise-wide.
So, you know, we might see students at a career fair in California, but we hired them for a project
in Florida. Because there's always needs, there's always, hey, I could go pursue this project,
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but for I don't have the right project manager, right? And we don't go get the project and then
go hire the staff. We have the staff before we pursue the work. And what's been really fun for
me to see is the level of sharing of resources within all of our regional vice presidents and our
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our businesses across the company and our regional offices, that when somebody raises their hand and
they have a real need, it's amazing how those get filled without really any intervention. I mean,
I don't have to step in and tell people, hey, you will give up a person. They just solve all of those
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issues on their own. It's really been remarkable to see that. And so all of those needs that are
internal are met by their peers and our RVPs that run each of our P&Ls across the country
have really fostered that whole approach of, hey, I'm going to give somebody up and I'm not just
going to give up a body. I'm going to give up my best person to go help solve that need. And so
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that's been a lot of fun. And that's really contributed to our business model, organic
growth. And it's really been successful. We've also started to do a lot more internal joint
ventures between regional offices. And we have a number of those going on around the country right
now, because a lot of times a project will be in our wheelhouse and in a geography that makes sense,
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but that location doesn't quite have all the resources it needs, but maybe another location
can take on a portion of the staffing needs, and then we're able to go pursue the job.
I think I've shared this concept on this podcast before, but there's this, I heard this, and I
can't remember the source otherwise I'd cite it, but there's four permutations of a relationship.
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There's win-lose, there's lose-win, there's lose-lose, and there's win-win. And only one of those
survives over time. And so when you have this philosophy where enterprise mindset, enterprise
first, people seem to be very willing to give up their best resources, because at some point,
they're probably going to be on the asking end of that same relationship. And so,
exactly right. It says easy does hard, as they say, but certainly makes sense, and it's pretty
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powerful and it's inspirational. Mike, you mentioned employee ownership as a core value
at a number of times, and clearly a big strength of the firm. Our structure is not an ESOP.
Our structure is a little unusual in the industry, but we have thousands of owners in the company,
is the way our structure works, and it's really been a differentiator for us over time. And it's
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one of our core values, and I think that that ownership mentality drives both culture and
performance, because employees are just invested at a different level. It's the same concept of
whether you own your house or you rent your house, right? And the way you treat the car that you own
versus the way you treat a car that you are renting, right? It's just a different mindset. And so,
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I believe our employees make decisions like owners of the company, because they are. And
they're thinking that way. They're thinking about what is, I'm representing the company as an owner.
And so, when they're working on a project and we have to get the job done, we have to meet a deadline,
we're trying to make sure that we're taking care of our clients, they will dig deep and they will
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make sure that we deliver because they're interested in the outcomes. They're not just here for a paycheck.
And so, our model is pretty simple from an ownership standpoint. We all share in the outcomes.
When we have a great year, everybody gets their part of the pie and everybody shares in that success.
And so, I think there's just a powerful correlation to that business model and our culture. Now,
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don't get me wrong, it's very demanding, right? This is a demanding industry. And I think no matter
what firm you work for or what model you work under, the demands are still there. Schedules are
always shorter. The demands are higher. Clients, what more things these days, projects are more
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complicated, they're more technical. And so, it's going to be very demanding. And what we lean on is,
yes, that's true, but it's also very rewarding when we can share in those outcomes at the end of the
day. I'm always amazed. I have to tell you, Scott, when I think about the performance level of our
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employees, I'm always surprised in a good way that when I put a stake in the ground and say, this is
where we need to get to, this is where we are going, this is the vision for the future, and then
turn it over to the employees and let them run with it. Every single time I've done that, the
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outcome is always above or exceeds my wildest dream of how that would have looked like in a
successful outcome. And so, our people are hungry, and when they have a direction and a mission
they're on, they always overperform. One of the things that I always find fascinating to really
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try to understand and dig into with firms that do have broad-based employee ownership is, you
know, what is the mindset and what is the healthy tension between being a growth stock and a dividend
stock? You know, I think about growth stock, they're plowing the earnings forward and continuing
to reinvest in the business to continue to thrive and innovate and regenerate the business.
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And the dividend stock, sort of in the extreme version, for the clip-in coupons and its distributions,
and that's the focus, and it can start to starve the company of future success and future investments.
Well, I think it is somewhat of a tricky balance for sure, but those decisions are made
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with all the stakeholders at the table. So, our board, which you and I have talked about in the
past, is made up of our operators, right? Our regional VPs that run our P&Ls, they're hands-on
in the business, and they're in all of those discussions. And so, we get real-time input
between, okay, this drives growth on the top line, this drives growth on the bottom line,
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this is an investment that we need to make because it's investing in the future,
and we have those honest conversations. And quite honestly, it really is about investing in our
people, and so those investments are pretty easy to make. And so, even if that limits us on the
top line or the bottom line growth, as long as we're investing for the right reasons,
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into our people or into our processes or into technology that drives outcomes and makes us
more efficient, those are pretty easy to wrap your head around and say, this makes a ton of sense,
and yes, we're going to pay for it this year, or we're going to spread it out over a couple of years,
but I think everybody's in alignment that we're in this for the long haul, and like I said,
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we're trying to get to 100 years. And so, there's not a lot of short-sighted pushback on any
variables in that formula. It really is about the long-term thought process, and I think it has
been that way for quite a while, and so, you know, I think it's easy when you have a model that's
thinking as far down the road as we possibly can, that that just sort of becomes the norm. And so,
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that investment in the future is really probably more dominant than thinking about
any one-year's performance or what the payout might be or the earnings per share that particular year.
So, just to continue on the people discussion, you've talked about just the training and how
you all equip your people. What do you all do specifically for high potentials, and how may
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that differ? So, our development program process is 100% performance-based model.
So, we are very focused on rewarding the top talent, both financially, but also with more
responsibility and more autonomy and authority, too, right? And so, it's really fostering the best
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of the best along the way. So, we have a pretty robust program that focuses both on the leadership
development side, but also the technical training side. We are moving towards more of a well-defined
competency-based model that I think our people will be able to even thrive at a greater level
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than they have in the past, and so, we are moving that direction very excited about that.
And then, we do most of our training internally, and so, we have great resources that help our
people get all the training and tools and necessary skill sets that they need. But then,
when we do get to the high potential talent development, leadership development, we use
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outside resources. We do 360 reviews. We do coaching, and it's really just bringing in
different ways of looking at the person as opposed to them fitting into a system, right,
that says everybody's exactly the same, and these are the six things that you need to be successful.
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Those become very customized at a certain level when we're trying to develop that next generation
of future leaders of the company. And so, that's been exciting to see, too, because we've seen
some great benefits from that.
Having spent your entire 33-year career with Hensel Phelps, which is amazing and quite a testament
to the business, what's the role that you thought you were stepping into five years ago as a CEO,
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and then, you know, how would you sort of describe it today?
I would say the role is pretty close to what I expected, quite honestly. The part that I did not
expect is how time constrained I would be. And it's mostly because there's so many things that
I would love to spend more time on, but I just can't. And so, that's the part that I think has been
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the most challenging for me to evolve over time into how to prioritize, how to make sure that
I know enough about things that I'm not that deeply involved with, but that I know are super
important, but also to just make sure I'm putting the time into the things that give the enterprise
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the most ROI. And so, that's probably been the most difficult thing for me. And it's a lot of trial
and error, right? I mean, you get involved in things and you get sort of sucked into certain issues
a little deeper than maybe you should have. And you look back and say, gosh, I could have probably
spent 50% of my time and the outcome would have been exactly the same. And so, it's some of that
(29:12):
trial and error that it's taken me a little bit to sort of find that groove. I feel really good
about it now, but I also have a great team around me. And so, I feel comfortable. I don't have to
micromanage anyone. I don't have to tell people how to do their jobs. I have an unbelievable
supporting cast of leaders around me that all perform at such a high level that I don't have to
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worry about that. I just focus my time into places I think move the business forward and
help us think around in the next corner. So, it's really a good spot to be. And I probably could
have used some of that insight when I first stepped into the role would have been somewhat helpful,
but I'm not sure how much of it you can really glean until you're living it a little bit. So,
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that's probably my biggest takeaway is managing my time. Oh, it's the Mike Tyson quote. Everybody's
got a plan until I punch him in the mouth. There's some things you just have to experience and then
you figure it out as you go. I think you and I may have talked about this in the past, but I was
talking to a former CEO a number of months ago who shared his take on that and how CEOs or
(30:24):
leadership teams should spend their time. You know, levels one through four, level one and two,
level one and two, your term, putting out fires, making a policy so that fire didn't happen again,
but levels three and four are really, you know, more strategic, look three to five years out,
and then level four is the enterprise level. You know, and how do we really get big picture and
what's the capital stack need to look like for the business, whether it be public or private,
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you know, what's the brand need to look like, all those sorts of things. And very easy to get in
a project-based business where there's a million fires every day all over the company. Very easy
to sort of get dragged into the business versus, you know, working on the business to use a cliche.
And I will say, Scott, just as a follow-up to that, I still see tremendous value in being on
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job sites. So even though I say I'm time constrained, I'm wildly focused on making sure that I visit as
many job sites during the years I possibly can, that is a great investment of my time,
because it gives me a chance to interact with our people to see what they're up to.
We built some amazing projects. I get to see them firsthand. You know, it doesn't do me any good to
(31:35):
look at the name of a project on a financial statement. If I've never been there, I can't
picture it. I don't know who the project manager is. I don't know when they plan to turn the project
over. If I don't know anything about the project, it's somewhat arbitrary what's on a financial
statement. So getting there, seeing our people, seeing who the performers are, seeing all the
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exciting things that they're working on is super valuable to me. And so I do prioritize that as
one of the main tenets that I'm going to invest my time into. It's interesting, you know, Starbucks
is in the news lately because they're changing their CEO, right? And I think I've got this right.
So if I don't, then certainly I'll take responsibility. But I think I've read somewhere
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that all of their outside hires start as baristas. Putting their last CEO. He spent a couple of weeks
learning how to be a barista, you know, serving customers. And I think to your point, knowing
the work, knowing the projects, and then in the case where you're just after the horse is out of
the barn looking at financial statements, much easier to do if you know what life looks like
(32:41):
through the project manager and superintendent size and if you've actually been on the project before.
So that makes a lot of sense. So like this has been a great conversation. We've touched on a
number of topics. I think clearly a significant portion of the success of the business has been
focused on the people and how you all have really invested in people and they've invested back in
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the business. But I'd be remiss if I didn't while I have you, get your take on just the industry
itself. And if you were to look in your crystal ball five years out or beyond, you know, what do
you think the industry looks like in five years? What do you think is going to change?
Well, there's a lot of buzz in the industry and then the world right now about AI, right, and
(33:24):
technology. And I think that will continue to positively influence our industry. And, you know,
not to replace people, but to enhance their efficiencies, not to make decisions on projects,
but to inform the decision makers and not to be a substitute to be a good builder. I mean,
(33:46):
AI is not going to be a substitute for a great superintendent. So I don't believe that AI is
going to replace a lot of positions in our industry, but I do think it will continue to support and
help and foster more efficiency and productivity. And it has to in some ways, you know, AI and
(34:07):
technology and innovation in general, because I believe we do need productivity improvements.
We're one of the least productive industries out there and we are slow to make improvements.
And we have a limited workforce and faster schedules. And so we are going to have to
lean on technology, innovation, AI, machine learning, data analytics, that whole realm
(34:30):
of technology components to help us keep up, I think, in the future, especially if this growth
continues. So I think that that will definitely be a tenant that's here to stay. And we'll see that
be even more prevalent the next five years. I think our industry will be more global. There's
some amazing companies outside the US that are bringing technologies and new products to market
(34:56):
that I think will continue to flow into our industry here in the US. And so I think we'll
continue to be more global. I think we'll be more connected. You think about it today, almost
every piece of equipment, every tool, every job site, everything is connected now. And so that
just produces so much data and so many inputs that it's a bit overwhelming. But I believe the
(35:20):
companies that learn how to harness that information and utilize it for their benefit
that will definitely thrive over the next five years. I think our industry will be more inclusive.
I think we'll attract more people that maybe even traditionally haven't had a strong presence in
our industry. That's exciting to me. And I think this mega project trend is going to continue.
(35:46):
I mean, it just feels like that's not slowing down. We're seeing more billion dollar plus projects
all over the country in all different sectors. And it just feels like that's a trend that's here
to stay. And so we've definitely embraced that. It's been part of our growth. But it brings different
challenges and risks. And we have to be ready for that as well and make sure that we are very
(36:10):
thoughtful in how we study those projects and how we look at them from a risk standpoint. But
I think that is here to stay. Yeah. So those are kind of some of the main tenants that I see playing
out over the next five years. It's certainly an exciting vision. You paint of the picture for the
industry as well as for Hensel Phelps and how you all are positioned in it. But again, I can't
(36:33):
thank you enough for being here. This is probably a good place to end the conversation. I really
appreciate and respect your time and want to give it back to you. So you'll take my call the next
time I reach out. But Mike, again, thank you so much. Thank you, Scott. I really enjoyed our talk
today and appreciate it. Thank you for listening. And please remember to like or subscribe to the
(36:54):
podcast so you don't miss an episode.
Hello and welcome. I'm Scott Winstead, FMI Consulting President. I'm really excited
(00:06):
to share my conversation with Mike Hoodke with you. Mike is the Chairman and CEO of
Hensel Phelps, which last year eclipsed a $7 billion mark and finished the year at
lucky number 13 on ENR's top 400 contractor list. They're fifth largest in domestic heavy,
fifth largest in transportation, number 17 in telecommunications, and number 19 in domestic
(00:26):
building and manufacturing. Mike has been with Hensel Phelps for his entire 33-year career,
having joined the firm right after college. He began his career as a field engineer and now
serves as the firm's Chairman and CEO, a role he's held for the last five years. Throughout his
career, Mike has been active in numerous industry associations and serves on several industry boards
(00:47):
of directors, including ACE Mentoring, Construction Industry Roundtable, also known as CERT,
YPO Gold, AEC Unites, and the National Academy of Construction. For ACE Mentoring, Mike currently
serves as the Co-Chair of the Transformative Partners Committee and will be the Vice Chair of
the Board of Directors for the ACE Mentor Program of America in 2025. He is a board member of the
(01:10):
Construction Industry Roundtable. He's also the 2025 Chair of Construction Safety Week, and he is
also a founding board member of AEC Unites, which aims to drive equity and inclusion across the
AEC industry. Well, good morning, Mike, and welcome to the show. Thank you so much for being here.
Scott, thank you so much for having me. I'm looking forward to our talk today.
Well, just to go ahead and jump in, Mike, if you would, I'd love to start off with just a thumbnail
(01:34):
of Hensel Phelps today. Sure, Scott. So I think most people know this, but just as a refresher,
our core business is a national domestic vertical contractor primarily, and we do some work in
infrastructure, water, wastewater, transportation, but primarily we build buildings vertical
(01:55):
construction, and primarily in the US we've done work internationally, but that's not a big part
of our business. We also have a real estate development arm of our company and a facilities
management group that delivers for our clients as well. And so we believe that we have this soup
to nuts approach where we have the pre-development, we can help our clients on the front end,
(02:18):
we can help in the development phase and the design phase, we can build the project, and then
we can be there for our clients after the project's complete and serve them in a built environment
and help them operate their facilities. And so it's a great business model. All elements of our
company are thriving right now. It's a great time to be in construction. We've seen unbelievable
(02:41):
growth the last several years, both geographically and by sector, and we have record revenue,
record backlog, record hiring, record growth in our personnel, and so it's just a really exciting
time. In fact, I was looking at this, we've grown 50% just since 2021. And so it really has been
(03:07):
amazing to see that. And we've also grown our self-work capabilities. And what's most interesting
about that, first of all, it's a core value of ours, being a builder is a core value of ours.
But our hourly growth rate is actually higher than the rate that we're bringing on salary staff
(03:28):
right now, which is also pretty high, but we're actually bringing our craft force on at a faster
pace to keep up with demand. And then also we're making significant investment in people and
technology. We've hired key personnel in all of those areas and investing a lot of resources into
how do we create a better experience for our employees and how do we keep up with technology
(03:50):
and investment and innovation. So that's kind of a thumbnail of where we're at today and it's
exciting times. If you kind of think about what you just shared as the current state,
what does Hensel Phelps look like in your view? Well, I think anytime that you see that kind of
growth, you have to worry about a couple of things. One is are you stretching too thin?
(04:13):
And do you have your people in positions that they're not prepared for? And so we have a lot of
focus on our training and development right now, making sure that our folks have the necessary
tools and resources and skill sets to execute on our growth. But I also think that you have to
make sure that your culture stays intact, especially as you grow at this rate. And so
(04:38):
five years from now, I see us really doing a doubling down on our core values, which are ownership,
integrity, builder, diversity, and community. And we will invest heavily into making sure that those
core values are present in everything that we do and really sets the foundation for our future
(04:59):
growth. So I think it's important to keep that in mind as we continue to think about what does it
look like in five years. So we also have, as I mentioned, a large focus on training and development,
and we have a number of employee experience initiatives that we will continue to roll out and
we will continue to foster really building on our employee-centric culture and the way that we operate
(05:26):
here. That's everything from how we recruit, how we hire, how we onboard, how we train, how we develop,
how we engage, the benefits we provide, compensation, the whole gamut of soup to nuts of the employee
experience from the first time they hear about Hensel Phelps until the day that they retire.
(05:46):
And so we have a number of major initiatives that I believe will be deployed in the next five years
that really just take all of that realm around our people to the next level. In addition to that,
five years from now, I think we'll see significant efficiencies in the industry through AI and
innovation and operational excellence. I think leveraging data analytics will be a big part of
(06:12):
what Hensel Phelps will utilize to make our people more efficient. I also think that we will continue
to make stronger connections with our industry partners, and I think we'll invest more heavily
in the ones that we wholly align with. And so I think it's a perfect opportunity for us as we
(06:34):
grow our business, but also grow those relationships and make sure that we have alignment with our
partners. And then we're going to double down on those relationships and make sure that we're
providing the absolute best value. And then the other thing that's pretty exciting is we will have
a new corporate office within the next five years. And so we're just in the early stages of design on
that, and we will be moving into that new facility here in a couple years down the road.
(07:01):
A very exciting time. So my smart-eye question is who's the lucky or unlucky project manager
to drew that short straw? Yeah, I don't know if that's been decided exactly yet. I know we have
some people working on pre-construction right now. I'm sure there's a long list that are lining up
to make sure that they get to work on this project. I would not envy them, but I'm sure that it'll
(07:24):
be just fine. We'll be pretty easy owners to work for. Clearly people and your commitment to people
is a bit of a through line. So, Hensel Phelps, highly regarded firm in the industry, been around
for a very long time. It's very easy to stagnate. That's clearly not the case. So as you think about,
you know, what is it about how you all do what you do that's made it stick and be successful
(07:49):
and thrive for such a long period of time? Yeah, it's a great question. You know, this is our 87th
year in business, and we are very focused on what it's going to take to get to 100 years in business.
That's kind of our major milestone coming up. And we have some time, but certainly we understand
(08:10):
the value of hitting that milestone less than a half a percent of all companies ever make it to 100
years. And so, and it all starts with our people, just like we've been talking about. And our model
is to hire, train, and retain the best builders in the industry. And that's what I think does set
(08:30):
us apart is we hire people. If they're new or entry level, they go in the field. They start in
the field. Every person starts in the field, and we think that's a foundational aspect of our training
and development program. If they come with experience, I'm sure they've been in the field
at some point, but we definitely want to train and keep builders on the roster. That's what makes us
(08:55):
really successful. And then, because we're employee owned, you know, our people tend to stick around,
right? We have great tenure. We have a program called the Old Timers Club, which is anybody who's
been with us for five years or more as an old timer. And we do a big celebration every year for
all those new old timers. And then we have celebrations around milestones after five years,
(09:16):
every five years. And the average tenure of those old timers is 13 years. And so we develop this
executive team that's made up of really lifetime employees. And it's a huge strength for us.
And so, you know, that's just that that drives culture. It drives training. It drives a sense of
(09:37):
family. All of those elements that we believe are important to that longevity and just creating a
place that people want to be at. And so I would say that that culture piece is really important for
us, part of that secret sauce that you talk about. And there's a famous quote out there by Peter Drucker
(09:58):
that culture eats strategy for breakfast. And I look at it a little bit beyond that. And I believe
that a culture that develops grit eats strategy talent and experience for breakfast, lunch, and
dinner. And so our people are gritty. They've seen every aspect of this industry. They know what it
(10:23):
takes to deliver. And they're undeterred in execution. So I believe that that cultural
aspect is really a big part of our secret sauce. And we give our people a ton of autonomy,
authority and responsibility early in their careers. And they thrive on that. That's what
they want. They want to have things that are very meaningful with consequences on the line
(10:48):
that they're responsible for. And I think that really drives outcomes and they grow pretty fast.
And I would say the other thing that is a part of our our model that is successful is
our people are willing to go where the work is. They're willing to relocate. They're willing to
to kind of use this enterprise first mindset to go where we need them to and what's best for the
(11:15):
business overall. In fact, I was looking at this the other day. We've had 30 executive level people
move across the country in the past five years. And these are project executive level transfers.
And most of them were for the same level positions. They're lateral moves. And so for people to be
(11:40):
that dedicated to the success and the outcome of Hensel Phelps as an enterprise over their own
personal situation and their own personal wishes is really a testament to how much grit those
people have and how much that's benefited them in their careers, but also the company overall.
And so I think when we when we engage our people, we give them exciting projects to work on.
(12:06):
We show them that this is a great place to work. We're hoping that they'll stay for their entire
career. And that's really what we've seen so far. That's great. And certainly proof positives when
you can cite stats like that. I'm reminded of a concept in nature that energy attracts like energy.
So you have a few concept if you put two pendulum clocks on the wall, eventually over time, they'll
(12:27):
sync up. Right. So like like mine and people tend to seek each other out. So as you talk about the
grit, the greatness of your folks and the lateral moves and the dedication to the company and the
cause, it certainly clearly seems to hang together, you know, and how you all think about constructing
the systems of the business and support of the purpose and the culture. So as far as today,
(12:48):
you know, the current state, how would you describe the business model? And then how do you,
you know, how have you seen it evolve over time? Well, we've always leaned into people's
entrepreneurial spirit. Right. We have a lot of aggressive, smart people. And they just have this
(13:08):
passion to explore new opportunities. And that's probably what's pushed us into almost all of
our new market expansion, whether that's geographically like in the Pacific Northwest, we didn't have a
strong presence there until several years ago. Gosh, it's probably been almost nine or 10 now.
(13:30):
But a group of people out of our NorCal office said, we want a presence in the Pacific Northwest,
we're going to make that a target. A bunch of people moved there, we got some work,
they grew and developed talent around them. And now we have a full blown, you know, regional
office there. Same thing in Nashville, same thing in central Ohio, we have a big project in Columbus
now, and we hadn't had a presence there before. Same thing in Hawaii and Guam. I mean, every one of
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those expansion areas geographically has been because a person or a group of people had a vision
to go conquer a new part of the country. And we let them seize that opportunity. And it's the same
thing in some of the market sectors that we've expanded into water, wastewater, mission critical,
advanced manufacturing, even aerospace, which we've been in since the late 90s, theme parks. I mean,
(14:23):
all of these segments that we've been involved with has been because people pushed us into those
spaces. And we've kind of fostered that entrepreneurial spirit and let people kind of run with that.
And then given them the Hemsil Phelps way, the platform underneath of them with our processes
(14:43):
and procedures and risk assessment tools, and the way that we think about business, it really is
the best of both worlds. And that's probably what's helped us evolve the most over time.
And I think, you know, you asked the question, how do I see it evolving in the future?
And it's already evolved, you know, since kind of the basic model that we've had for a really long
(15:08):
time, in the way that it's evolved is that we've brought in a lot of subject matter experts and
specific expertise in certain areas where we just don't have homegrown expertise. We brought in a
CPO, a CIO. We brought somebody in as a Chief Administrative Officer, a Director of Data
Services and Analytics, cybersecurity professionals. I mean, we've brought in the elements that we
(15:33):
can't homegrow and coupled that with longer term employees and the culture that we've created over
87 years. And I think that's really where the future will be is that blend is how do we bring in the
experts to backfill the areas where we know we need support and also continue to grow our people
(15:55):
from the ground up and fostering that mindset of seizing opportunities. So that's how I see it
evolving and it already has kind of shifted that way. It's been exciting too. Very exciting and very
intentional around people. You know, Mike, it's always fascinating to me to really step back and
(16:16):
analyze these large companies and you all have $7 billion and growing and the fact that you've
gotten there just in the last few years. You see some firms that are that size or larger that have
40 or 50 offices. There's a lot of sprawl and if you really look closely, it's 40 or 50 different
general contractors that roll up to a P&L. Then there's that have a much smaller footprint in
(16:38):
terms of physical presence where it is a business and a business model and it's sort of the branded
house versus house of brands philosophy. As you look at Hensel Phelps, number of offices,
typical project size, kind of how does that play into how you all have constructed the infrastructure?
Yeah, our growth has really been organic. I mean, we've made two acquisitions,
(17:03):
one in 1987 and one in 2021. And they've been very important strategic acquisitions,
but that hasn't really been our model. Our model has been strategic growth organically.
And I believe it really all starts with 100% enterprise first mindset from our people. I mean,
(17:25):
that's how they think they're willing to share resources, they're willing to give up
key personnel to go support another part of the business. Our hiring is now enterprise-wide.
So, you know, we might see students at a career fair in California, but we hired them for a project
in Florida. Because there's always needs, there's always, hey, I could go pursue this project,
(17:51):
but for I don't have the right project manager, right? And we don't go get the project and then
go hire the staff. We have the staff before we pursue the work. And what's been really fun for
me to see is the level of sharing of resources within all of our regional vice presidents and our
(18:12):
our businesses across the company and our regional offices, that when somebody raises their hand and
they have a real need, it's amazing how those get filled without really any intervention. I mean,
I don't have to step in and tell people, hey, you will give up a person. They just solve all of those
(18:33):
issues on their own. It's really been remarkable to see that. And so all of those needs that are
internal are met by their peers and our RVPs that run each of our P&Ls across the country
have really fostered that whole approach of, hey, I'm going to give somebody up and I'm not just
going to give up a body. I'm going to give up my best person to go help solve that need. And so
(18:58):
that's been a lot of fun. And that's really contributed to our business model, organic
growth. And it's really been successful. We've also started to do a lot more internal joint
ventures between regional offices. And we have a number of those going on around the country right
now, because a lot of times a project will be in our wheelhouse and in a geography that makes sense,
(19:22):
but that location doesn't quite have all the resources it needs, but maybe another location
can take on a portion of the staffing needs, and then we're able to go pursue the job.
I think I've shared this concept on this podcast before, but there's this, I heard this, and I
can't remember the source otherwise I'd cite it, but there's four permutations of a relationship.
(19:43):
There's win-lose, there's lose-win, there's lose-lose, and there's win-win. And only one of those
survives over time. And so when you have this philosophy where enterprise mindset, enterprise
first, people seem to be very willing to give up their best resources, because at some point,
they're probably going to be on the asking end of that same relationship. And so,
exactly right. It says easy does hard, as they say, but certainly makes sense, and it's pretty
(20:09):
powerful and it's inspirational. Mike, you mentioned employee ownership as a core value
at a number of times, and clearly a big strength of the firm. Our structure is not an ESOP.
Our structure is a little unusual in the industry, but we have thousands of owners in the company,
is the way our structure works, and it's really been a differentiator for us over time. And it's
(20:34):
one of our core values, and I think that that ownership mentality drives both culture and
performance, because employees are just invested at a different level. It's the same concept of
whether you own your house or you rent your house, right? And the way you treat the car that you own
versus the way you treat a car that you are renting, right? It's just a different mindset. And so,
(21:02):
I believe our employees make decisions like owners of the company, because they are. And
they're thinking that way. They're thinking about what is, I'm representing the company as an owner.
And so, when they're working on a project and we have to get the job done, we have to meet a deadline,
we're trying to make sure that we're taking care of our clients, they will dig deep and they will
(21:26):
make sure that we deliver because they're interested in the outcomes. They're not just here for a paycheck.
And so, our model is pretty simple from an ownership standpoint. We all share in the outcomes.
When we have a great year, everybody gets their part of the pie and everybody shares in that success.
And so, I think there's just a powerful correlation to that business model and our culture. Now,
(21:51):
don't get me wrong, it's very demanding, right? This is a demanding industry. And I think no matter
what firm you work for or what model you work under, the demands are still there. Schedules are
always shorter. The demands are higher. Clients, what more things these days, projects are more
(22:13):
complicated, they're more technical. And so, it's going to be very demanding. And what we lean on is,
yes, that's true, but it's also very rewarding when we can share in those outcomes at the end of the
day. I'm always amazed. I have to tell you, Scott, when I think about the performance level of our
(22:34):
employees, I'm always surprised in a good way that when I put a stake in the ground and say, this is
where we need to get to, this is where we are going, this is the vision for the future, and then
turn it over to the employees and let them run with it. Every single time I've done that, the
(22:57):
outcome is always above or exceeds my wildest dream of how that would have looked like in a
successful outcome. And so, our people are hungry, and when they have a direction and a mission
they're on, they always overperform. One of the things that I always find fascinating to really
(23:21):
try to understand and dig into with firms that do have broad-based employee ownership is, you
know, what is the mindset and what is the healthy tension between being a growth stock and a dividend
stock? You know, I think about growth stock, they're plowing the earnings forward and continuing
to reinvest in the business to continue to thrive and innovate and regenerate the business.
(23:43):
And the dividend stock, sort of in the extreme version, for the clip-in coupons and its distributions,
and that's the focus, and it can start to starve the company of future success and future investments.
Well, I think it is somewhat of a tricky balance for sure, but those decisions are made
(24:03):
with all the stakeholders at the table. So, our board, which you and I have talked about in the
past, is made up of our operators, right? Our regional VPs that run our P&Ls, they're hands-on
in the business, and they're in all of those discussions. And so, we get real-time input
between, okay, this drives growth on the top line, this drives growth on the bottom line,
(24:31):
this is an investment that we need to make because it's investing in the future,
and we have those honest conversations. And quite honestly, it really is about investing in our
people, and so those investments are pretty easy to make. And so, even if that limits us on the
top line or the bottom line growth, as long as we're investing for the right reasons,
(24:55):
into our people or into our processes or into technology that drives outcomes and makes us
more efficient, those are pretty easy to wrap your head around and say, this makes a ton of sense,
and yes, we're going to pay for it this year, or we're going to spread it out over a couple of years,
but I think everybody's in alignment that we're in this for the long haul, and like I said,
(25:19):
we're trying to get to 100 years. And so, there's not a lot of short-sighted pushback on any
variables in that formula. It really is about the long-term thought process, and I think it has
been that way for quite a while, and so, you know, I think it's easy when you have a model that's
thinking as far down the road as we possibly can, that that just sort of becomes the norm. And so,
(25:44):
that investment in the future is really probably more dominant than thinking about
any one-year's performance or what the payout might be or the earnings per share that particular year.
So, just to continue on the people discussion, you've talked about just the training and how
you all equip your people. What do you all do specifically for high potentials, and how may
(26:09):
that differ? So, our development program process is 100% performance-based model.
So, we are very focused on rewarding the top talent, both financially, but also with more
responsibility and more autonomy and authority, too, right? And so, it's really fostering the best
(26:32):
of the best along the way. So, we have a pretty robust program that focuses both on the leadership
development side, but also the technical training side. We are moving towards more of a well-defined
competency-based model that I think our people will be able to even thrive at a greater level
(26:53):
than they have in the past, and so, we are moving that direction very excited about that.
And then, we do most of our training internally, and so, we have great resources that help our
people get all the training and tools and necessary skill sets that they need. But then,
when we do get to the high potential talent development, leadership development, we use
(27:17):
outside resources. We do 360 reviews. We do coaching, and it's really just bringing in
different ways of looking at the person as opposed to them fitting into a system, right,
that says everybody's exactly the same, and these are the six things that you need to be successful.
(27:37):
Those become very customized at a certain level when we're trying to develop that next generation
of future leaders of the company. And so, that's been exciting to see, too, because we've seen
some great benefits from that.
Having spent your entire 33-year career with Hensel Phelps, which is amazing and quite a testament
to the business, what's the role that you thought you were stepping into five years ago as a CEO,
(28:01):
and then, you know, how would you sort of describe it today?
I would say the role is pretty close to what I expected, quite honestly. The part that I did not
expect is how time constrained I would be. And it's mostly because there's so many things that
I would love to spend more time on, but I just can't. And so, that's the part that I think has been
(28:24):
the most challenging for me to evolve over time into how to prioritize, how to make sure that
I know enough about things that I'm not that deeply involved with, but that I know are super
important, but also to just make sure I'm putting the time into the things that give the enterprise
(28:46):
the most ROI. And so, that's probably been the most difficult thing for me. And it's a lot of trial
and error, right? I mean, you get involved in things and you get sort of sucked into certain issues
a little deeper than maybe you should have. And you look back and say, gosh, I could have probably
spent 50% of my time and the outcome would have been exactly the same. And so, it's some of that
(29:12):
trial and error that it's taken me a little bit to sort of find that groove. I feel really good
about it now, but I also have a great team around me. And so, I feel comfortable. I don't have to
micromanage anyone. I don't have to tell people how to do their jobs. I have an unbelievable
supporting cast of leaders around me that all perform at such a high level that I don't have to
(29:38):
worry about that. I just focus my time into places I think move the business forward and
help us think around in the next corner. So, it's really a good spot to be. And I probably could
have used some of that insight when I first stepped into the role would have been somewhat helpful,
but I'm not sure how much of it you can really glean until you're living it a little bit. So,
(30:02):
that's probably my biggest takeaway is managing my time. Oh, it's the Mike Tyson quote. Everybody's
got a plan until I punch him in the mouth. There's some things you just have to experience and then
you figure it out as you go. I think you and I may have talked about this in the past, but I was
talking to a former CEO a number of months ago who shared his take on that and how CEOs or
(30:24):
leadership teams should spend their time. You know, levels one through four, level one and two,
level one and two, your term, putting out fires, making a policy so that fire didn't happen again,
but levels three and four are really, you know, more strategic, look three to five years out,
and then level four is the enterprise level. You know, and how do we really get big picture and
what's the capital stack need to look like for the business, whether it be public or private,
(30:48):
you know, what's the brand need to look like, all those sorts of things. And very easy to get in
a project-based business where there's a million fires every day all over the company. Very easy
to sort of get dragged into the business versus, you know, working on the business to use a cliche.
And I will say, Scott, just as a follow-up to that, I still see tremendous value in being on
(31:11):
job sites. So even though I say I'm time constrained, I'm wildly focused on making sure that I visit as
many job sites during the years I possibly can, that is a great investment of my time,
because it gives me a chance to interact with our people to see what they're up to.
We built some amazing projects. I get to see them firsthand. You know, it doesn't do me any good to
(31:35):
look at the name of a project on a financial statement. If I've never been there, I can't
picture it. I don't know who the project manager is. I don't know when they plan to turn the project
over. If I don't know anything about the project, it's somewhat arbitrary what's on a financial
statement. So getting there, seeing our people, seeing who the performers are, seeing all the
(31:59):
exciting things that they're working on is super valuable to me. And so I do prioritize that as
one of the main tenets that I'm going to invest my time into. It's interesting, you know, Starbucks
is in the news lately because they're changing their CEO, right? And I think I've got this right.
So if I don't, then certainly I'll take responsibility. But I think I've read somewhere
(32:19):
that all of their outside hires start as baristas. Putting their last CEO. He spent a couple of weeks
learning how to be a barista, you know, serving customers. And I think to your point, knowing
the work, knowing the projects, and then in the case where you're just after the horse is out of
the barn looking at financial statements, much easier to do if you know what life looks like
(32:41):
through the project manager and superintendent size and if you've actually been on the project before.
So that makes a lot of sense. So like this has been a great conversation. We've touched on a
number of topics. I think clearly a significant portion of the success of the business has been
focused on the people and how you all have really invested in people and they've invested back in
(33:02):
the business. But I'd be remiss if I didn't while I have you, get your take on just the industry
itself. And if you were to look in your crystal ball five years out or beyond, you know, what do
you think the industry looks like in five years? What do you think is going to change?
Well, there's a lot of buzz in the industry and then the world right now about AI, right, and
(33:24):
technology. And I think that will continue to positively influence our industry. And, you know,
not to replace people, but to enhance their efficiencies, not to make decisions on projects,
but to inform the decision makers and not to be a substitute to be a good builder. I mean,
(33:46):
AI is not going to be a substitute for a great superintendent. So I don't believe that AI is
going to replace a lot of positions in our industry, but I do think it will continue to support and
help and foster more efficiency and productivity. And it has to in some ways, you know, AI and
(34:07):
technology and innovation in general, because I believe we do need productivity improvements.
We're one of the least productive industries out there and we are slow to make improvements.
And we have a limited workforce and faster schedules. And so we are going to have to
lean on technology, innovation, AI, machine learning, data analytics, that whole realm
(34:30):
of technology components to help us keep up, I think, in the future, especially if this growth
continues. So I think that that will definitely be a tenant that's here to stay. And we'll see that
be even more prevalent the next five years. I think our industry will be more global. There's
some amazing companies outside the US that are bringing technologies and new products to market
(34:56):
that I think will continue to flow into our industry here in the US. And so I think we'll
continue to be more global. I think we'll be more connected. You think about it today, almost
every piece of equipment, every tool, every job site, everything is connected now. And so that
just produces so much data and so many inputs that it's a bit overwhelming. But I believe the
(35:20):
companies that learn how to harness that information and utilize it for their benefit
that will definitely thrive over the next five years. I think our industry will be more inclusive.
I think we'll attract more people that maybe even traditionally haven't had a strong presence in
our industry. That's exciting to me. And I think this mega project trend is going to continue.
(35:46):
I mean, it just feels like that's not slowing down. We're seeing more billion dollar plus projects
all over the country in all different sectors. And it just feels like that's a trend that's here
to stay. And so we've definitely embraced that. It's been part of our growth. But it brings different
challenges and risks. And we have to be ready for that as well and make sure that we are very
(36:10):
thoughtful in how we study those projects and how we look at them from a risk standpoint. But
I think that is here to stay. Yeah. So those are kind of some of the main tenants that I see playing
out over the next five years. It's certainly an exciting vision. You paint of the picture for the
industry as well as for Hensel Phelps and how you all are positioned in it. But again, I can't
(36:33):
thank you enough for being here. This is probably a good place to end the conversation. I really
appreciate and respect your time and want to give it back to you. So you'll take my call the next
time I reach out. But Mike, again, thank you so much. Thank you, Scott. I really enjoyed our talk
today and appreciate it. Thank you for listening. And please remember to like or subscribe to the
(36:54):
podcast so you don't miss an episode.
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