00:00
Hi, welcome to Power of the Network. I'm your host, Tim Locker, Vice President of Broadband here at CBM. We've got a great show for you this week. We're gonna bring in Mr. Tyler Wesselman. He's the President of MegaKC. We're gonna talk all things construction, leadership, and we're gonna talk about ESOPs. That's one of the things that we share in common is that his company and ours are both in ESOP. We're very proud of that. So, very excited to bring him in and see what I can learn from him. Follow along.
00:32
Tyler, thanks for joining us today. Appreciate you taking the time to come in here and visit with us. It's great to meet you finally, personally, so welcome. Well, thank you for having me. Excited to be here, Tim. Absolutely. Let's kind of start a little bit with your background. You went to college, know, pursuing a degree in construction. Construction management, is that accurate? And then you come right out of school, go right into the construction industry. What was it about just...
01:01
construction in general that you were so interested in? A lot of it started when I was actually a kid. I loved being around machinery. I actually spent a lot of time with my grandpa on my grandfather on his farm doing the small things hands-on and then obviously my dad he was in the ready-mix industry flying concrete to contractors, builders. You know I spent a lot of time just being around that environment and you know
01:30
A lot of that led me to just following my passion. And I thought the closest thing if I'm going to college, construction management, a business degree in construction. And that led me to where I'm at today. That's awesome. The one thing that I was kind of similar, like back in high school or actually even in maybe eighth or ninth grade, my dad and my stepbrother,
01:54
we're doing like side jobs. My dad had a construction background years ago and my stepbrother was older and he was kind of starting into that contractor space. We were doing all these side jobs and I spent many of summers, know, roofing or siding or building garages and those kinds of things. And right out of school, I kind of just went and worked for a contractor. But there's special about like seeing the results of.
02:22
of what you do. And there's probably no better industry to do that than construction. Absolutely. You know, when I was still in high school, I had the opportunity to work for a local bridge contractor. So kind of tasted some of that early on. Man, it's almost like a team out there, you know, building something that you're going to see for a long time. And a lot of the work I've been involved with is public projects. So city, state, county.
02:51
projects, a lot of infrastructure, but I did that all for summers of college. So I was fortunate enough to spend a lot of time out in the field and really see where the nuts and bolts come together and make things happen. But what carried forward is as we do a lot of work here in Kansas City, man, you can't hardly drive anywhere further than a mile without seeing a project you might have been involved with. man, that just gives you a good sense of pride.
03:21
So I was going to ask, know, going from being hands-on, I'm sure you're not out, you know, pouring footings on a day-to-day basis. So do you get that same sort of pride from seeing the projects done now with your team doing it versus, you know, something you actually had your hands in? How does that, has that changed or? Yeah, it's a different kind of reward or fulfillment.
03:48
A lot of what I see now is much different than in the past. So I get to see a project from the point where it's just an idea. that's a whole different dynamic. That's kind of fun. You're talking to the people that get to use this product in the end. You're starting there and you're getting to follow through its whole life cycle. So as you look at your team and what they're able to do and how they can help our clients and people build these projects,
04:17
I mean, that's rewarding in whole other way. And obviously I still get all the updates and get to hear the fun and not so fun stuff that we got to go through in this industry. But being an employee-owned, it tends to lead to your joy coming from the success of your team and your employee owners and the stuff you get to do with them. That makes sense. So it's my understanding you started as an intern in 2010? That's correct. Actually, I talked about working for a bridge contractor.
04:47
I had an internship opportunity with Mega KC at that time, the summer before I graduated college, and I turned it down. Obviously, several reasons for that. as I reflected on things going into my last year of school, I called our current CEO, retiring CEO. I called him and I said, I've kind of shifted my priorities here. I'd love to explore an opportunity to come to Mega.
05:14
know, oddly enough, two months before I graduated, he accepted me as an intern. And, yeah, been there ever since. How long did it take before you realized, like, this is where I need to be? You know, I've never thought I was in the wrong place. So I feel like since the day I started, I that might sound a little cheesy, but the reality of it is I never felt like I was in the wrong place. A lot of it started with the connection that I made with a few of the people there.
05:43
as as I started. And as I reflect on that, I mean, that's what's led me this whole time, create a little loyalty. The employee ownership piece was something that kind of came a little bit after I started. It wasn't the thing that got me there, but obviously it's the reason that I feel like we got a good thing going on. we'll definitely going to touch on the ESOP piece. That's one of the challenges that we have with new people.
06:10
that aren't familiar with it or haven't been in the plan that long and that don't really understand the value of it. How do we sell that as a true benefit? So we'll talk more about that as we move along. When you started, there was roughly 20 employees. Now you're pushing 100. Talk about the and I guess not the change, but the growth of the company from that.
06:40
from the inside, you know, what did that growth look like? Yeah, so, you know, a lot of what we looked at in the past was how do we get the next big project? How do we, not even big project, how do get the next project? How do we get more of it? But then we started looking at probably five years ago, we actually put together a formal strategic plan and we actually track it every year. We meet every year, we knew this.
07:08
A big part of what we realized at that point was that we're not approaching this in the right way. So we looked at our people first and we said, we've got to build a structure that supports growth. Obviously, at one point we didn't have all the departments. It was pretty well, there was a few gatekeepers and that's how the whole company operated. But obviously there's not a lot of capacity there.
07:35
As we looked at our people, we said, who do we not have on this team that we need and who is on this team, but they need to be in a different role in several years. And we've really focused on, you know, looking at that forward-looking succession planning and really trying to plan around the people and what they're capable of and where they're going to take us. You know, crews on the job sites, that's where the bread and butter's made. So we know that's got to be our priority.
08:03
But also we have to have infrastructure and organizational chart to support that at a business level. a lot of our growth has been around opportunities have been created because we have the structure in place with the people. What were some of those key missing roles? Over the last several years, well I'll say this, at one point we didn't even have foremen, we had superintendents and then our skilled tradesmen. We shifted.
08:32
We shifted, we added foremen. We've also added some structure within that group of division managers that help, that support the superintendents out in the field. And also at one point we had estimators and project managers in the same role. We did not feel like, when we had that in place, we didn't feel like our operations out in the field had the support because obviously winning the next project is important, just as important as building the current project.
09:01
So we separated those two roles and all this is pretty well operational things. So as we worked through that, we took those steps first. And then as we looked forward, we said marketing and business development, we need some structure around that. That can't be the CEO or, know, that's pretty well it was as a CEO, you know, trying to lead an effort there and then expecting everybody in operations or estimating to lean into that and make something happen.
09:30
It's hard to make a marketing person out of somebody that's not got that mind, you know, or their priority. They've got other tasks at hand, you know. Absolutely. And, you know, as we looked at it, we had a VP of operations, you know, which helped us lead the whole operational group, but we still had some boundaries where operations was, you know, kind of the reporting structure was not all going through that position. So some of these roles we added to really make some movement.
09:59
We added a director of HR, is surprisingly, that was our first move because we set our people, we've got to figure out a structure and support our people. We made that move first, then came marketing, then came business development. that HR is a big piece, especially the more people you get on board, there's risk and protection, obviously, that you've got to take care of the company.
10:28
you know, lawsuits or whatever, know, weird things can happen when you're dealing with people and HR. But also just, you know, like you said, taking care of the employees and it's even more relevant when they're owners, you know. So that's one thing I've learned over the years that, you know, the HR piece of it is very important because you've got to protect the company for, you know, for the employees, for the owners. Yeah. And we look at that, you know, we don't,
10:58
look at that role as just a compliance piece either. It's really part of our strategy and our strategic planning going forward. know, everybody has the desire to be the best place to work. need a person in a seat that's kind of always reminding us as we look forward, how are we going to do that? So what does that HR role do from that aspect of, you know, promoting, you know, the value of working here?
11:28
you know, what we do for the employees and all that thing. What is the outflow of that position? lot of what that role is doing currently is really building some infrastructure. I'm going say that that tells our employees we are supporting them. We're trying to develop them. They have a career here that is more than just, we need you to get this job done. We're currently like we're working on this.
11:57
every day trying to figure out what's the path forward for the people. really that, you know, this role is going to help us better define that. as no matter what seat we're sitting in, whether it's our COO, who has, you know, also recently been promoted to the role to take over operations, whether it's them or division manager or our director of pre-construction, our goal is that our people are always being heard to this person.
12:26
And they're also kind of our guiding light in how we take some next steps in building our people out. have different, I guess, skill training or other types of courses and things that you do for the employees? Yeah, so we have different programs. Right now, this is part of our growth strategy is developing
12:52
I'm going to say training plans for every role. It's really started with project management. It's going into superintendents. then craft on the job site, actually are reigniting our apprenticeship program through association called ABC. They're one of our Merit Shop partners and organizations that we use and they have training programs for the trades.
13:18
On the job training is obviously an everyday thing. I value that most personally. That's for any of my experiences has been the most valuable. Is it a union shop or no? No. We're non-union. I can get into that later too with the ESOP situation. Yeah, I'd like to understand that dynamic. Yeah. Yeah. So, you know, we view it as a huge benefit. Being a merit shop, non-union allows our craft to participate in ESOP as well.
13:46
They're not signatory, so they are able to be employee owners and get the benefit of what we call the long-term retirement plan. It's our path to freedom. That's one of our core values. And it's freedom to do the job the way you need to do it, but it's also freedom every day. We live our lives the way we need to live them because we have financial freedom. No, that's great. Back to the structure. So as you kind of maybe took a flat,
14:17
you know, the hierarchy, what is it called, damn Organizational. Thank you. You know, so you go from a more of a flat org chart to, you know, more of a pyramid type, more different, you know, as you add those levels, you know, from a, maybe it's just perception, but you add those different levels to, people feel like there's more growth opportunity when that transitioned? Yeah. And you know, you said flat.
14:44
Actually, what I feel like it was, it was very straight up and down where we had ultimately kind of a straight. Well, you know, we didn't have enough depth is what we'd say. By adding departments, we kind of branched out, allowing people to kind of own what they specialize in. It has created a lot of vision for opportunity. You know, the biggest thing I see that comes from this is people do want to own.
15:12
I'm going say their department or their role. But as long as you're playing in it, it's hard for them to really do their job the best they can do it. And this is probably a growth opportunity for me in particular that it's not necessarily trusting people, it's trusting yourself that you've got the right person here and you're ready to hand this off. We kind of went through phases as I worked through the organization and handing off things and operations that I
15:42
I mean, I came through operations and estimating. So operations was the first thing that I handed off and that was to our COO is fully accountable for the whole operation now. And then estimating and sales, pre-construction, that's been the last piece. And obviously that's an important part of any business, handing that off. what I've seen is that teams can actually do a lot better when you get out of the way.
16:12
And even our outgoing CEO, he's got the same mentality. And I think it's allowing us to start to take off here. Yeah. That's one of the things that, you me as you know, younger leader, I guess, in terms of, you know, how long I've been working for the team, but trying not to be the bottleneck, you know, you don't, it's nice to know everything, but you don't have to make every decision.
16:42
You know, so if you, if everybody's waiting for you to make, make a choice on something, you're just slowing down the whole process. But what kind of things, like when you say to get out of the way, what, what, give me an example of, of something that you had to stop doing. Yeah, I'll just, well, let's just go to example for operations. You know, I had this, uh, this feeling that, uh, you know, every contract that went out the door, subcontract or commitment went out the door. You know, there was a little bit of like.
17:12
Should I be reviewing this? Should I be approving these? I mean, this is several years ago, but that's one step to say, these guys and gals are employee owners. They're making the interest. The right choice based on what they believe is best for the company. And we have some parameters that we've defined now. Defining that SOP or standard operating procedure and what the metrics are around that is probably what we...
17:40
You know, some have said internally that some things were tribal knowledge. Yeah. And trying to define those so that we can empower people to really do their job well is probably what we focused on. So, you know, that's just an example of like, hey, I don't have to review every contract. There's different ways to check these. If something really goes downhill, you can circle by and say, okay, what did we do? You know, coach them through it and not make the same mistake. And, you know, and then on the estimating side,
18:08
As we've gone through history here, we have a good, hey, before any proposal goes out, we sit down as a team, we review it so that we cover our risk, but also meet the expectations of our clients. And I handed that off probably a year ago, and things have taken off. So your estimators, is that your sales team? Because I hear that term a lot in the construction industry, but essentially that's your sales arm.
18:38
That is correct. you know, that arm, know, business development and estimator sales are really two different things in our eyes. Our business development department does not propose on the projects. They help us find the work, support the pursuit, make connections, get in front of our clients, make sure we know their expectations and needs.
19:05
With that, it allows, then we get it to estimating to where it's not necessarily a motivation to get the job just for purpose of revenue. We want to get it the right price that meets our business plan. with that, business development also leans into client experience in our company. So client experience is a big piece for business development. That's on ongoing jobs. They're actually part of our customer check-in so that we can get feedback for ongoing jobs.
19:34
that's independent of the operation that's running it. So we get kind of unbiased feedback. doing so much work in the municipal space or government space infrastructure, most of that stuff's all got to go out to bid. So you're always competing on price. What are you able to do to differentiate yourselves and your company and your work and battle that price?
20:02
You know, that's the age-old question. We've been, you know, I guess the first approach is if we're competing in that manner where it's low bid against the contract, we are going to serve our clients well on that, so our reputation will feed to other opportunities down the road. But even with that, we also focus on, I mean, work here that is not easy. Even if it's low price, we want to be more qualified.
20:32
We want clients to have high expectations on the jobs we're on. If the expectations are low or the scope's kind of fundamental, we're probably not the right one for the job. We can do it, obviously. But we're setting ourselves up to handle projects that are more technical. They have more logistical challenges. And we'll compete well on the price side.
21:02
But we hope that opportunity leads us to doing well and then earning a reputation that we've earned over the last 34 years here in Kansas City. What's the percentage of your repeat business versus new?
21:16
That is a loaded question too. I'd say we've, you know.
21:21
I would say that our repeat business is, and I'm going to make up a number if I even said it, I'm going to. Higher or lower? It would probably be, I mean, 50 % of our work is repeat customers, whether that's in the last two years or in the last 10. Well, some of those cities aren't spending that kind of money on, you know, every year, you know, some of them. yeah. Yeah. I mean, I'm sitting here today and
21:50
Kansas City out on kind of the east side of town. mean, we've built the project probably within a mile of here. So for the city of Kansas City, we built them for, I mean, all the suburbs around here. So, you know, I would say we've built more than one project for nearly every one of our customers. your wife ever get sick of you just saying, hey, you know, we did that, we did that as you're driving through town? Yes. She says, you're going to wreck us. You're going to wreck the car, families in the car. We got to, you know, pay attention. No, she actually,
22:20
It becomes part of the culture at home a little bit, but she also reminds me, hey, you got to be here when you're here. So I thank her for that. Do you have to travel much? No, we actually, since we're focused here in Kansas City, a lot of our market right now is within about 90 miles of downtown. But we do go further than that on occasion, obviously with the right partner or the right client that we want to team up with, we can go out there.
22:49
Most of our work, our people are getting home every night. And if I do travel, it's for work conferences or opportunities to develop myself and anybody on the team. fortunate. What kind of things do you do for your own self-development? Well, right now I'm actually enrolled in a leadership program. It's actually a CEO leadership program for ESOPs. And I'm doing that in July. And then I've got an
23:18
for a week and then I've got another session in December. So you kind of have a... What's the course? Who puts it on? It's put on by... It's sponsored by NCEO, but it's the University of Pennsylvania. Okay. And they've been doing it since the early 2000s. So I've heard great things about it. I've actually, you know, got some referrals from some people that have been in it. And it's only 20 people a year. Okay. So you build kind of a peer group and...
23:45
I'm really looking forward to it. I think it's more focused on not the technicalities or the, you know, I'm going say the financial leadership and those kind of things. It's more around being a true leader, leading the team and the people. So that's one of my first big steps here in the next year. you know, what do you hope to Honestly, I hope to learn how to. I'm going to say.
24:13
lean into the people, support the people, the employee owners of our company, and really take my operational experience, my technical experience, and develop that in more of a, I'm going say, leadership support around the people that actually are doing the work. become a, I want to say, a more influential leader. Our company has always had leaders that are
24:41
technical savvy, do the work well, and I still want to be that person, but I think this is an opportunity to build relationships, learn how to build relationships that'll last a long time internally and externally. So I really hope to learn a bit more about myself. Well, I think that's one thing too that I've recognized is that we're all here for a different reason. Everybody's got a different reason they get up and go to work.
25:09
It could be financial, it could be the freedom you talk about, it could be a list of different things. But I think it matters getting to know the people, understanding why they're here. You've got to have rules and you've got to have policy, but you also have to have that intimate relationship with everybody too. So that's just one thing I've noticed.
25:38
and I think it matters a little bit. So we did an exercise, oh, last summer, been a while back, but just had the group together from one of our planning meetings and we just literally sat around the conference room and I asked that question, why are you here? What's important to you? And if you want to share, great, if not, we're not gonna force you to, but from a aspect, what matters to you most? And everybody went around the room and
26:07
And it was interesting how much we all learned about each other too. So it gave us a little different perspective. Yeah. And, you know, as you say that, you know, we're kind of going, we're transitioning from when I started to where we have fewer people to get more, you know, have more people on the team. And as, as we look at that, we got to, we got to stay in touch with the people on the team, the people that have the, you know, you know, as I carry the vision forward, we got to be able to touch people.
26:33
in a way that they're motivated by where we're going and that's why they're on the team. You know, one of the things we did similar to you is we actually, you we all took certain tests that tell us our strengths and then we had sessions with our teams where we sat around as a group and we learned, hey, where are our strengths leaning into how we react to things, how we manage things. you know, one of the biggest takeaways that I think we get from that sometimes is as you look at your people,
27:01
They all have good intentions or their strengths might come across as a, not a weakness, a deterrent to what we're trying to do. But actually if we use each individual strengths, well, it'll lead us in good direction. And the camaraderie improves as you just openly talk about it. And you're like, I know why you're doing that. Here's what we can do.
27:25
CBM is a manufacturer's rep based right here in Kansas City. We've got territory where we cover from Iowa all the way down to Texas. We cover specifically three different market segments, utility, commercial industrial, and broadband communications. CBM is structured differently. We're an employee-owned company. We're ran as an ESOP. That allows us to do business differently. We can cross.
27:51
lines of markets, we can put our people where they need to be and really have expertise in the right place. That's what makes a difference for our customers and for our manufacturers. If you think we can help you with the product line in the Midwest, look no further than CBM. Find us right here at cbmrep.com.
28:15
So let me ask you this then, do you think it's better to highlight somebody's strengths or try to make improvements where they're weak? You know, the answer is highlight their strengths. And that's probably one of the biggest challenges I feel like too. It is. And, you know, we've even had some partners come in and help us facilitate this discussion. And what we find is sometimes strengths lead to
28:45
blind spots or places where those strengths have kind of taken us down the wrong path. And we try to focus on that more than looking at weaknesses, just, hey, why are we on track? It's probably because, you know, being an executor or somebody that isn't really strategically, you know, doesn't think strategically as much, their execution strengths are pulling them in a little bit of the wrong direction. We just need to get realigned on where we're going in.
29:13
and the why behind it, but. Well, sometimes I wonder too, is it a strength or is it a comfort? You know, for example, say, let's just say we've got a sales guy that's really good on these five lines, but you know, not so much on these five lines, you know, is, I mean, obviously if he's doing really good selling one thing, he's got some good strengths in sales. So is it a comfort thing that he's maybe not comfortable with?
29:43
these other products or what really is it that we're missing? So obviously we want him to do really good with the things he's doing really good with, how do we, what's the strategy for bringing up the other side? Yeah, a lot of times I look at that, obviously capacity has to be a thing. can't just... You can't do everything. You can't do everything. So sometimes the way I look at that is maybe we need to lean into that person's strength and keep them on that side of the line.
30:12
and make sure we're using them. Figure out a way to let them do more over here and offload this. And bring in, know, shore that up with maybe another person or a different person and their role, maybe shifting it to where they're taking some of that off their plate and we all end up more productive. you know, that's obviously finding out what strengths each person has. You know, the strengths we kind of focus on are, you know, this is several examples, there could be 50 of them, but
30:42
responsibility or accountability. Like there's different things that drive people to get stuck in certain tasks or certain sectors of our business. And we try to identify those so that... Like what would be an example? You know, some people, you know, obviously they never want to miss a deadline. So they might rush, you know, their strength might be responsibility or make sure it's done. Well, they want to triple check everything. Well, maybe we need to shift some roles here where they can...
31:10
handle that strength and capacity and not ultimately over burn themselves out or end up not getting done on time because they're taking too much. As we look at it, there's a good reason certain things happen and how we shift that among the team and share the load. Or like we said, if somebody's better at something, let's use them for that more than we have in the past. And really.
31:39
you know, move responsibility around. You know, back to the growth a little bit and, you know, I've always heard there's a couple of different plateaus in business where, you know, you'll stall out at, you know, at different levels. The numbers really don't matter, but, know, where you plateau. Do you feel like because you changed that structure, is that what really released that plateau and made you, made the growth happen?
32:08
Yeah, you know, I've been asking this question internally for the last six months. We built a structure ahead of the growth. you know, I can't pinpoint any one thing that is allowing us, I mean, we felt like over the last three or four years, we were building a structure that allowed us to handle growth, but we were doing it in advance. it was obviously, you know, it created a little bit of
32:37
pressure or stress on just, well, how is this year going to be a good year for we're building something and paying for something that's going to get a return down the road. I do think that all of that has led to the trajectory we're on as a company right now. But I can't pinpoint one specific item within all that investment that is leading to this success and growth. just a general change in movement.
33:06
Yeah, I mean our market is obviously, construction industry is interesting right now. It's in high demand. A lot of the stuff we've always done, we're more successful than we have even been in the past. But, you know, as I look at the structure we built, we're actually able to execute in certain facets better because, you know, we're not relying on one or two people to really drive the ship. We've got a whole team to do it.
33:35
When we do have challenges come up, we're able to handle them better and really focus on our clients. That message started about four years ago and I really think it's taken off. How risk adverse are you in terms of, you mentioned like, okay, we're going to invest in this so it pays off in the future. How do you balance that risk and still protect the employees, protect the company, protect the ESOP?
34:05
How much are you willing to gamble on those future payoffs? I'm doing a little more each year. I was probably more conservative in the beginning than some of my team. I'm more willing to gamble as we, I'm not even going to call it gamble. I'm sure you've got a plan. We've got a plan. So we look at the next two years in pretty good detail. And that's developed a lot over the last three four years. A lot of what we look at,
34:32
Also, as a strategic discussion with our board of directors, we have a couple of external members on our board, which has been a big change for us as a company. their expertise, their market outlook, their experience from where they came from, and they bring that in and help us kind of look outside of our own walls, allows me personally to have more comfort.
35:01
and what we're trying to do. It's just all on your shoulders. You've got some other experience to relate it to. obviously tracking it and having a plan around it allows you to pull some levers. If something goes off plan, we're going to change and pivot. And we know we're going to have to pivot. But right now, things have kind of been moving as planned. There's a lot of comfort in it because our team also believes in it.
35:30
If I was the sole person trying to push something and we didn't have buy-in from our team, it'd be a different story. Interesting. Let's kind of move into the ESOP a little bit. As you know, we're also an ESOP. Ours was established in 88. And that was actually an exit strategy for one of the former principals, John Marietti. So the employees bought the company through the ESOP.
36:00
took a loan and bought the company to buy Mr. Mary Eddy out. Went through the whole, paying off the loan process and now it's fully funded ESOP plan. It's what drives our culture and it's an awesome retirement for us. But talk about how yours was established, the reasons behind it and what it's done for your company.
36:27
Yeah, MegaKC was a general contractor founded in 1992. Through the early 2000s, construction obviously continued to evolve, but the CEO at that time decided that his succession plan was to obviously transition himself out and we actually became 56 % ESOP. So the employee owners took out a loan, bought 56 % of the company.
36:57
and three other individuals own the remainder of the company. Since then, in 2018, the last two shareholders, our stakeholders for the company, sold their shares and we became 100 % employee-owned in 2018. We were formerly known as Mega Industries Corporation and we rebranded as Mega KC as part of that transition to 100 % ownership and that's what people know us as of now.
37:27
It was always actually part of our email address. So it wasn't like a new name by any means. Just formal. Yeah, just formal. you know, I feel like as we look back, employee ownership and being an ESOP has really been the driving vision around what we do. It's a pretty common, you know, strategy where, you know, the original founder
37:57
you know, time to retire, you know, it's difficult to sell a company like that. There's a lot of things to do. And so, you know, it's a really good exit strategy for somebody that's going to start it and built up a business, you know, so it's pretty common. You know, ours was, you know, similar fashion. So it's not uncommon to form an ESOP, you know, like that. So, no, honestly, you know, as I look at
38:22
people that I have relationships and their businesses and I talk about this because ESOP's a lot to absorb as you look at all the dynamics and the technical pieces that have to be handled through it and a transition like that is, it's kind of overwhelming. But as I look back in the experience that I personally have built and our company's built over the years, there's a lot to go through there that if you're ever going to become an ESOP,
38:52
It does help to have some peers that have done it and lean into those people. I look at even my dad being a partial owner in a business, if I knew what I knew now, I'd recommend him becoming an ESOP. It's a great succession plan and you continue to work there even if you sell the business. you know. What's interesting, just recently, a lot of
39:18
political stuff we don't need to get into, but they were talking about jobs and hiring people. That's a whole nother challenge, et cetera. But one of the things that they said was kind the most important in terms of keeping and retaining employees is that they have stake in the game. And that's really what an ESOP does when you boil it down. That's what you do. You've got stake in the game. You've got a part ownership.
39:48
One of the things that we've, you our message has been for years, you know, act like an owner. And, you know, basically that means, you know, do the right thing for the customer, be responsible, you know, we're not going out and spending a bunch of money on expenses just for frivolous, for fun, you know, we're responsible. But one of the challenges also that comes with that is when you say act like an owner,
40:14
Well, there's an org chart for a reason too. Not everybody in the company can make the same decisions that Marla can, for example. There's a chain of command for a reason, so sometimes that gets misconstrued when we say act like an owner, but I think you get the message. Yeah, and we lean into that, kind of say, I mean, we've got some shirts that say this, but on it because we own it. As we look at that, everybody needs to own their role.
40:43
We all got different decisions to make every day to support that. So, kind of understanding that just because you have shares in this company is not the same. You don't get to make every business decision for the... So, we all kind of execute on our roles as an employee owner. That's going to create success. And obviously, hopefully drives culture and it's contagious.
41:10
And the benefit, obviously, is a long-term benefit that I still got a long road ahead of me, but I hope that as I go to retirement one day, I can tell a lot of good stories of other employee owners that have had the path to freedom through MegaKC. Do you do an annual meeting around the ESOP every year? We just finished ours actually last week. Ours is next Friday.
41:40
We wait to do it in the summer a little bit because we have a lot of interns. We have six interns this summer and we like to allow them a little piece to see a piece of this and what that's all about and the culture around it. We bring all employee owners into an event to announce the new stock price, usually have a message around a special topic that's important to us and really try to build some camaraderie around it and hopefully be celebrating most of the year.
42:10
Yeah. You know, and it's, like I said before, it's one of those things that's, it's, we've, it's been a challenge for us because it takes a little while to see the benefit. We've made some changes where now new hires are directly into the plan. So, you know, it used to be, you know, a year waiting period to be into the plan. Then it was six months. We just took that away. Cause if you started, you know,
42:39
you start in February and have to get all the way through the year and then do another year to be eligible. Then you're on your third year before you ever even see a benefit from it. So people would be like, eh, you talk about this, but like, where's the beef? So we've eliminated that. So even if now you start in November, next year when it's all done, you're still gonna get a contribution. Now it's a smaller percentage because you worked
43:09
two months out of the year, but at least you're quicker to see that benefit. So that's one of the changes that we've made in the past few years that's, I think, helped some of our new people see the benefit a little bit better. Yeah, we've done the same thing. We used to have a 500-hour requirement to get a contribution in a year. Now there's no requirement. You get a full contribution for every bit that you worked in the first year. And then obviously, have a vesting schedule.
43:38
That's six years. Yep. We're on the same. you know, and, and, we are, you know, like, do you have much turnover? You know, I would say I don't want to, I'm a knock on wood, but we've had great, we've had great results over the last year and a half, two years. Yeah. Obviously, you know, things changed in 2020, 2021 a little bit with COVID coming in and there was a lot of dynamic to work through and, just, you know, everybody,
44:08
had some point of views that opportunities came about and different things. So we had to adjust, pivot, but our focus that we've had for the last two or three years is really, I feel like it's paying off. we continue, like I said earlier, Director of Human Resources is here to help support us in making great decisions that support our employee owners and give them a true best place to work mentality. And obviously, financial goals are important for an ESOP.
44:38
And those results should feed to some of the success with turnover, but it can't be the only thing. So that's super important to us. It's, know, I feel like there's a lot of construction companies that are kind of leaning into that ESOP. We've got a sign control traffic company, you know, that's near me and, you know, they're in ESOP. There's a big outfit across the street that does a lot of road.
45:08
road type work there in ESOP. And you see the retention of the people and just the whole different atmosphere versus like, for example, another drilling contractor that I know recently just sold his business. And like it was a mass exodus after they sold the business, new people bought them and everyone's like, no, we're out. Whereas in ESOP, you've got that
45:37
that planning in place. So as you're changing the guard, you will, recession planning, it's built right into that process. So I think that's a very big piece for us is we're handling our manufacturer relationships, you know, with the different lines. There's safety for them in that we have that recession plan, you know, if you will. So if,
46:06
If Marla left and everybody quit, you know, we're no value to those manufacturers. So there's some built-in benefits there as well. Yeah, I think it's, it comes down to, I feel like ESOPs, they purposely have to communicate better. You communicate where you're going. You know, internally we are, we have kind of an open book mentality, you know, whether that's financials or what's strategic plan? What are we trying to do?
46:36
What that does is it creates stability around, we're not working for one person. And if that one person isn't here, this company falls apart. This thing is kind of a trough for all of us. We've got to fill it up. it should give externally a lot of comfort for our clients and people we do business for. Really, it's...
47:06
transition and getting to become an ESOP is kind of the build out phase. But once they are stabilized, I think history tells us that ESOPs are a good business structure and really lead to lot of success for a lot of people. mean, in Kansas City in particular, I have a lot of pride in our ESOP network around here. We're part of several organizations, ESOP organizations, and no matter where you go in the country,
47:35
I mean, we're represented well at all those conferences. I mean, naturally, it's a big part of the culture here in Kansas City. Yeah. All right. I want to talk about your core values. I wrote them down here, so I don't forget. But safety, quality, community, and freedom. You kind of touched on the freedom a little bit before, but let's wrap it up here and just kind of finish on your core values and what they mean to you.
48:04
I mean, construction safety, I mean, there's no given there. We have this motto of safety over everything. So no matter what you're doing, we're going to do it safe. Everybody's going to go home safe to their families. We feel like, you know, if we ever, you know, obviously that's How do you handle a risk taker? Like I think about, you know, my son's in construction and residential mostly, but like, I know he's taking risks that he shouldn't.
48:31
How do you handle a knucklehead like that? Like, okay, we're going to get you up on that roof, but we're going to do it safely. You know, you got to start day one with, I'm going to say the message you got to put out is that there's no tolerance for it. Obviously, as we look at us as a business, I mean, there's a lot of risks we take every day in our people. And this all translates to all the people out there. one of the big things is, our people have been here for a while, they have to...
49:00
see something, say something and not support any, I'm going say risk taking. Safety is not a thing you can sacrifice in a business. Somebody doesn't go home at night, I never want to have that call and I know nobody in our business does. we actually just got our whole program evaluated by our insurance broker to try to
49:30
make sure we're focused on the right priorities within our safety program. And that's just one example of a bunch of different efforts that we're trying to, as we grow, it doesn't become more important, but it does. I mean, it's got to be the most important thing all the time. So safety over everything. We start every meeting with that discussion, like a lot of contractors do. We lean into that. As we look at quality, I mean, if we're not putting in good work, our reputation will be shattered.
50:00
We don't travel the country right now. We do go outside this market a little bit, but we have a lot of focus here locally. we can't burn bridges. We can't put in poor work. if we do, whether it's our client or our engineering partners or our vendors or subcontractors, all those partners in business, the word gets around. it's kind of what we're founded on is just.
50:27
putting in quality work and it's going to drive to success. It's going to lead us to success. So we lean into that. And then as we look at community, it's kind of a natural piece because Kansas City's home, it's in our name. We build the stuff we drive on, the water we drink, the water that goes down the toilet. I mean, all of that is part of the infrastructure that we work on. So it's natural for us to look at community and say, hey,
50:57
We've got to take care of the place where we work, live and play. And that leads us to kind of the philanthropy side of things, charitable side of things. We have a committee internally that focuses on our efforts centered around the actual donations we make with monetary value, but also the hours our employees will donate and put back into the community. that one hits close to home for a lot of us. And it sounds easy to...
51:25
say write a check for this or do, but you the efforts that go into organizing that stuff. So your company shows up and people have the opportunity because people are willing to do it. They just need a little guidance at times. you know, I really, you make it easy for them to do it. Yeah. That's the key. Absolutely. We look at every year we look at, Hey, you know, financially, this is how the year went. And a portion of that always, we, we judge our next year's contributions based on that.
51:54
Even if we don't have a successful year, we still got to look at that and decide how we're going to give back to our community. Yeah. It's just part of the plan, part of the budget. It's got to be. Freedom, you kind of touched on that, but wrap up on that. Yeah, I mean, that's kind of the almighty ESOP piece. I hope that we have all kinds of freedom stories. And as we look at freedom, it's financial freedom, freedom to make decisions, do the job the way you need to do it.
52:24
for the ESOP. When I look at ESOPs, we have an economy that probably can be viewed as good in some eyes and bad in others. I hope that living our lives through the freedom of the ESOP, financial freedom, allows people to bridge that gap and support all, no matter where you're at in the economy, support all people that are trying to change their...
52:53
their legacy and honestly support what they want to do in their lives. mean, work isn't the only thing that is important to all of us. mean, it can become a thing if you let it be, but a lot of us got things. We all go home to our families and honestly, we want freedom today and down the road. And if we don't plan for it, which an ESOP does, we may not, know, all that would be for naught. you know, the freedom piece is probably...
53:22
There's a lot of people that are approaching retirement and we're going to soon have some stories to tell. Yeah. Which is probably the most exciting part to me. actually celebrate, you know, I'd like to say we celebrate millionaires in the USOP and hopefully have a whole bunch more of those in the near future. Yeah, that's awesome. I can't thank you enough for coming in. I've learned a bunch from you today. So it's great to meet you and thank you. Thank you, Tim.
53:51
Appreciate it.
53:56
Just want to say thanks again to Tyler for joining us on the show today. I feel like I learned a ton from him. It's great to hear about his journey, how he got to not only where he is, but how he got to where he is now, moving up through the corporate ranks. I feel like I learned a ton about E-Sops and some of the different strategies and some of the direct benefits to the employees and to the team. So was great conversation.
54:22
Thanks again, I appreciate you coming in. Thanks for watching Power of the Network. Please give us a like, comment, subscribe, and until next time, we'll see you next time.
