HCI's 2016 Learning and Leadership Development Conference: David DeFilippo Keynote

Some feels right knowing that Boston's own with the Red Sox. So good morning everyone, and I just want to thank HCI and all the sponsors here for having me here today and for allowing us to talk a little bit about Suffolk instruction and the work that we're doing. How about the presentations from Kimo and Trisha? Pretty terrific, huh? Really appreciate the point Trisha made about caring as a leadership characteristic and Kimo's perspective on the business first. Really great points. So one of the cool things about this slide is these are actually Suffolk employees. This is my good friend Sean Edwards, I'm really Lambert Enos from our marketing department. So these are real people, they're not stills. So how many people here are Patriots fans? Yeah, okay, you had a few hands. I wish she had a few more, feel alone numbered. So during the game, I just have to tell you this story. During the game we have three dogs, they're little terriers and they're really, really feisty. And I feel a little bit like Jimmy Garoppolo today because during the game two of them got in a fight and they bit my hand, but I'm in the game today. So Jim, I don't think Jimmy's gonna be in Thursday, but I had to make it here to the HCI conference. I want to just point out two of my colleagues who were here. Where's Liz and Kate? If you could just wave your hands there in the back of the room over there and the right. Everyone, so if I say anything here that you want to check out, go see Liz and Kate. They'll verify that what I'm saying about Suffolk is true or they'll disprove it. So I want to show you a quick video as a way of telling the Suffolk story. So Mitch, could you please cue that up?

Okay, thank you. So I want to talk with you a little bit about our business. That video that you just saw is a video from a program called We Are Suffolk. I'm going to talk a little bit about that later today, but that video really sets the culture in the context for Suffolk. And as you saw, some of the big buildings in that video are buildings that are real projects around the country in our various regions. So it's Suffolk. We're a 34-year-old Austin-based firm. We have 1,550 employees nationally. We're about 2.5 billion and we're privately held. We have 450 million in bonding capacity which allows us to do our work. And we're based in several different locations around the country. We were founded here in the Northeast, so the majority of our employees are here. We're also in the Southeast region in Miami and West Palm, and also in the west coast of Florida. And then we're up and down the coast of California from San Francisco down to LA and also down to San Diego. The way the construction management business is structured, we run the business in two different segments. So those segments are things like commercial buildings, healthcare buildings, education buildings, and the like. And so a quick story: if you had asked me a year and a half ago if I'd be in the construction industry, I would have said no way. So I spent the last dozen years in the banking industry. And when the people at Suffolk called me, I knew the company because of a Boston guy. When they said hey, we'd like to talk to you, I said are you kidding me? I can't even screw a light bulb in my house. And so my perception, if you will, of construction was that it was kind of a rough and tumble crowd, it was people walking around the office with tool belts on. And I found out that that just isn't the case. It's a very, very complex business. The personal story for me though about this is that I came from a family where we ran a very small construction business. And as a kid as a teenager, I remember being in the trench with my father, with my grandfather, doing that type of work. And for me, the goal was always to go to college. I was the first person in my family to go to college. So the idea of going backwards to construction was kind of a funny thing. I will tell you though, I've been at Suffolk now for a little over a year. Probably one of the best professional decisions I've ever made. And the stories and the examples I'm gonna talk to you about today are gonna illustrate that point. So Suffolk runs its business really through three strategies. The first strategy, innovation, is a really key strategy for us. Innovation in our context means things like running our projects through a lean construction process, so running projects in the most efficient way possible, creating the most flow with our people and also the many subcontractors that we work with, and trying to do things on behalf of the owners that make the projects as efficient from a time perspective and a cost perspective as possible. We also do things for our employees who work on jobs like slate sites, like having an iPad. Everyone has an iPad, they can read plans through iPads. So the digital age that Kimo was referring to has really helped us do things in a way that accelerates the work we do. The other example I'll give you of digitization that's important to us is we run processes like virtual construction design. And what that means essentially is we can build the building from the architect's plan before we physically build it. The benefit of doing that are things like we can find conflicts in buildings that would cost us and the owners a lot of money, and we can avoid them before we actually pour new concrete, put up any steel, or erect any walls. Our second strategy is community. And this is a strategy that as a career educator I'm particularly proud of. We are very, very present in the communities in which we work and live all over the country. One example of that is a nonprofit that we run out of Suffolk called the Scholar Athletes Program. We have people who work in school systems in the Boston area. We're gradually expanding nationally, and they teach study skills to students who aspire to go to college, who aspire to move on with their careers, and ultimately move into the workforce. It's a terrific program. Our people strategy is central to enabling the business. And so the focus now on our people strategy is on the diversification of the business. It's focused on scaling everything that we do so it's repeatable and sustaining what we do. And we're in a very nice business cycle. If you walk out onto Seaport Ave here, you can see that there's a lot of construction going on in Boston. The same is true in New York, the same is true in San Francisco. So we're in a nice cycle. The key to that cycle though is from a human capital perspective, ensuring that we can do things in a repeatable, sustainable way because our mantra is we want the experience that we can deliver in Boston to be the same in San Francisco, to be the same in the Southeast region, and really all over the country. So these strategies link very specifically to our talent strategy. We believe the single biggest differentiator we have is our talent at Suffolk. The reason we believe this is because building a building at some level, whether you use innovative technologies like I described or whether you use processes that are innovative, it's a commodity business. So at some level, the differentiator that we all have to have is that our talent has to be very, very well-trained, very engaged, and able to do things in the most efficient, effective way possible. So these are the six core beliefs that we have at Suffolk. We try to provide everyone with opportunity within the organization. We believe that development is a joint responsibility, it's not an entitlement. We're very focused in our revised performance management process on both the what and the how of performance. We believe that managers have to develop their people. And we believe in meeting challenges head-on. So one of the things that I would say is true about Suffolk is it's a very direct culture. I can compare that to working in a bank for a number of years which wasn't as direct, but in a way it's very refreshing. And we believe that everyone grows. We believe that everyone in the organization can grow with the company. As we have success, we want our people to grow to positions of greater responsibility, to learn, to be valuable to our workforce, but also to be contributors in the community and the like. So how do we do it? We organize our talent in several different segments. We've done this based on the leadership pipeline model, which I'm quite sure that many of you have read. And we've organized the entire company which is focused on probably about 70% of our workforce, our operations folks. 30% are non-ops people like myself who don't know how to build buildings, but we support the building of buildings. And we categorize people and have learning solutions that we assign to people through talent assessment processes so that we can have a very, very strong understanding of the workforce and have people focus on the learning solutions that are right for them. If they're an individual contributor and they want to become a first line manager, if they're a technical expert and they want to get wider in their role and develop greater technical expertise, or if they're in a leadership position, we want them to move out to a region that's a growth region or we want them to take on a new sector or new area of responsibility. So what I'm gonna do is talk with you a little bit about some of the examples of how we operationalize these different talent segments. So I'm gonna give you three examples that are essentially cases on how we do this. So the first is that we run our operations learning curriculum through a role-based curriculum. And so the point behind this is that our objective is to be able to scale talent in a consistent way nationally and do it in a way that we can give employees line of sight to where they are, what's the next opportunity, and how do I get there. And so this grid does a couple things. It focuses on the fact that all of our employees and our job structure is segmented into competencies. We also have identified the proficiency requirements for each role, and then we've assigned curriculum to them. So what you have here is an example of two typical roles in our organization: what we call a project administrator and a project engineer, and the associated competencies for each one of those roles and the proficiency level required. So the goal here is to be transparent, provide line of sight and learning opportunities, and then enable this through a talent management system. What happens with this is we review people's performance in our talent assessment process, people create individual development plans in concert with their managers, and then that all leads into a succession planning process. So here are the important points. All this is probably sound super obvious to everyone, but this is all based on science. So the science of instructional design, right, which in the early days was founded by Robert Gagné during World War II, right, to train pilots how to fly airplanes. That's kind of an important thing, you want the plane to fly. Exact same process. We've done the instructional design work to make sure all these different pieces fit together. The modularization of learning, which is part and parcel with Skinner's work, to ensure that we're giving people the appropriate amount of content at the right time based on the job they're in so they can learn it, master it, and be proficient. The last point about proficiency all is related to Bloom's taxonomy. We want people to learn the simple tasks and move to the more complex tasks. We've structured our curriculum in what we call a 101 to 401 construct so that again employees have line of sight to where they are, where they want to go, and how to learn. And then of course we do things like testing and evaluation. So we feel it's really important given the nature of our work where safety is a primary concern that we test employees pre and post so we can measure the learning that's been achieved, we can look for any gaps or any patterns across the system, and then we can continuously improve the learning architecture and the learning curriculum so it's the most effective that it can be. So let me give you a quick analogy. When we think about building a building, we need to have an architect's plan. We use our standard operating procedures that are the gospel in our company that you have to do them because they're all measured on a quarterly basis. So it would be like not doing any of that if we didn't have a way to build our talent, right? The risk that we would assume and the variability possibilities would not be a good thing. So we treat our talent in the same vein. We want to have structure and process to make sure we can scale talent in a consistent way and have the same experience for all of our employees around the country. So second key strategy: we don't believe that culture is an accident. And I will tell you that Suffolk has a strong culture. A lot of that is based on the kind of Boston New England Puritan roots here. And we've learned that one of the biggest challenges and also one of the biggest opportunities as our business grows is that we want to be very, very careful about risking any dilution of culture. So what we've done is we've created a process that within the first 90 days we have our employees go through a program called We Are Suffolk, which was the video that you just saw a few minutes ago. We use that during that program. And the whole idea here is to model the Suffolk culture, bring people to Boston where the company was founded, have them spend time with leaders at the corporate office, have them spend time in the field at job sites. And when we do that at job sites, one of the cool things that we do is we have the job site teams actually talk to and present to employees and mix and mingle with them so they can really get a feeling of what it's like to be part of Suffolk. Now the problem we were trying to solve with that program is we wanted to make sure that we got people early to really drink the Kool-Aid. We were trying to mitigate risk against attrition that we saw that some people, particularly from different parts of the country where they were in growth regions and they didn't really know who Suffolk was, got a sense of the way we operate and what our core values are. And then ultimately to create a really, really strong connection to the company. So let me illustrate that point. We've run this program for the last year and we have people do all the kind of formal things that you would do in a program like this, but then we give them a half a day on the last day and we say hey, go out in Boston. We give them some gift cards, we say have a good time, you know, go to Cheers, go see some of the sites, go to Faneuil Hall, etc. Maybe you're gonna do some of those things if you're not from Boston. We're here at the conference. And so one of the gentlemen who was coming to the program from one of our regions that wasn't here in Boston contacted us and said, you know, I've never been to Boston in my life, it's gonna be the first time I've ever been there, and my wife's never been to Boston either. Would it be okay if I brought her? And we're kind of a smallish company, we're not as formal as some of the other large companies I've worked for. We were kind of like, hey, we don't have a rule for that. So in the absence of having a rule, we said you know what, let's just do what we think the right thing is. So he said yes, and we said bring your wife, have a good time, take her out on that free day, she could be part of the team and essentially part of the family. And the best part of the story is the guy went back home, they reflected on it over the weekend. That next week he wrote a note to us and said, you know, thank you so much for letting me do this. The thing that you guys have to be really happy about is now my wife says I can never leave Suffolk. So it's kind of a funny example, but it just shows that type of strong connection that we're trying to make with our employees early in their tenure so that they feel really good about the culture and the context of the organization. So the third example I want to talk with you about is a program. If We Are Suffolk is all about culture, this program called Career Start is all about the future leadership of the firm. And so Career Start is a program that's been around for about 10 years. My colleague who is waving in the back, Liz Collins, runs Career Start. And Career Start is a program where we recruit non-technical liberal arts kids that are just getting out of school. And we recruit about 24 of them a year, and we put them around the country in our different regions, and we have them do three different rotations. Those rotations are designed so that they're focused on critical capability areas that we have at Suffolk. So things like how to work on a project team, things like estimating. Estimating is a critical capability that we have at the firm. And then usually one other thing that may be a non-ops or ops area so that folks get a well-rounded sense of the organization. The key thing about Career Start though is it's a ten-year bet essentially. What I mean by that is that we know that these young people coming in don't have a technical degree. They didn't go to school for construction management for the most part, and we have to teach them the technical skills they need to do their jobs. So we are betting on essentially their potential based on their backgrounds, based on the types of perhaps sports or activities that they did in college, that they have the potential to contribute at a higher level and ultimately be a leader in the firm. So we do things with them like leadership training. You can see here we do kind of some team building type things to get them early, but we have to teach them all of the technical skills. And so this is one of the probably most important things that we're doing to fill our succession bench. And it's 10 years old, and at this point we have about, it's right around 55% retention in that program. It's starting to seed the next level of the organization where we see people getting to the middle management level of the organization at that kind of 10-year mark. Another example that I'll just share with you about our commitment to talent and the way that we think about talent as a key capability for the business: our chairman and CEO, who's the founder of the organization, John Fish, every year has a Career Start do a rotation with him as essentially his assistant for the year. So I'll tell you a funny story about this. So in my first meeting with John, I was with the company about two weeks. I go into the conference room and we're sitting there to meet, and you know I figure it would be a little meet and greet, we would talk. And there's this other person in the room with a notepad ready to take notes, and they were demographically younger. And I'm thinking, why is this person here? So John looks at me because he sort of caught my body language kind of wondering what was going on, and he said, he said, David, every year I have a Career Start join me for the year so they can learn what it's like to be a CEO. And he engaged that person in the conversation, making it a three-way conversation. And the learning that happens for that rotation accelerates these individuals' careers very, very quickly. So our commitment to talent and our commitment to grabbing people when they're young and helping them rise through their career is unparalleled, and programs like Career Start help us do that. So I want to kind of end where I began, and I want to just focus on a couple things. So in summary, our focus, and I think our focus as practitioners needs to be on the business. I think Kimo said it really, really well. We believe that everything that we do from the standpoint of our learning and talent at Suffolk has to be focused on our business goals, whether those are innovation goals, growth goals, or even in some cases the things that we do for engagement inside the company and in our communities. We also believe that the structure and process we put in place creates a consistent experience for our employees and ultimately our clients. And that linkage for us is very, very important because structure and process gives us scale, and scale is gonna help us become the size company that we want to become. And then the last thing that I would just say to you as practitioners is that everything that I just talked about is based in science. It has nothing to do with making things up. It has nothing to do with technology. One of the points that I think Kimo and I agree on very strongly is that technology is an enabler, it's not the end answer. The science is actually the answer with regard to how we structure our talent segments, how we structure our learning solutions, and ultimately how we implement those things through multiple modalities, whether it's e-learning, simulation, classroom, or we're using MOOCs or using our mobile devices. So I encourage all of you to focus on the science to enable your business goals and ultimately have the type of success that you want to have. And with that, I'm in the enviable position of I've got 11 minutes. If there are one or two questions, I was hoping that would work out that way. So are there any questions in the audience? I'll take an answer, please. I can't see your name, so.

I think we need a job aid for the mic. Talk loud.

It's a great question. So for a curse, I'm going to repeat the question because it might have been hard to hear. So the question was, how do we go about identifying the students that enter into the Career Start program that I just mentioned? So there's a couple different things that we do. The first one is we look at the schools. And like probably all of your firms, we have alumni who have gone to certain schools and we have a preference in a lot of cases for those schools. But what we're really interested in are individuals at those schools that have had strong academic credentials, number one. Folks that have done other things, whether it's sports or they've been involved in community types of activities while they've been in school, or even if they've been in clubs and things of that nature. The point of that multifaceted approach to finding talent is that we want people that are going to be well aligned to the way that we do things at Suffolk and the expectations that we have. So if you go back to what I said earlier, innovation, community, and people, that diverse set of strategies is part and parcel with the way we look at our talent. So we want to make sure that people are going to fit in that and they're gonna feel really well aligned to the expectations that we have at the firm. Because I don't know the percentage, but Liz and Kate might, a very, very high majority of our people are involved in activities in the community. And at the junior levels, it could be things like just going out and building bikes with kids that are in need. And at the senior levels, most of our management committee is on either one or two boards in their respective city in which they reside. So we do that, we segment that way. And then we bring people in and we bring them to job sites because we want to make sure that they actually, you know, if you're gonna be part of a job site team, you're gonna build the building. We want them to know what it feels like to be at an office which sometimes is a trailer outside of a job site, and you're gonna interact perhaps with subcontractors who are actually the guys and gals with the tool belts on. We want to make sure people feel comfortable with that, and that's really more of a cultural thing and a personal attribute thing. And then the last thing we do is we bring them in to our corporate office and we interview them, and we have them sit with senior executives to really make sure that we are comfortable that they've got both the background, the gravitas, and the skills to be part of this very, very special and important program for our talent pipeline. So thank you very much for the question. Are there any other questions I could take, please?

It's a great question and likely should be up here with me. Yes, so I'm gonna repeat the question. So the question was, based on doing three rotations which are eight months each, about in roughly a 24-month period, right, plus or minus because sometimes projects make it longer, is the goal for those people to have a job at the end of it? The goal is for each one of those people to end up in a permanent role in the company. What we hope happens, and this happens I think both through the individual's experience but then also it happens with some coaching. And I'll tell you, Liz who I keep pointing to in the back is someone who really counsels these folks along the way to understand what do they like about a rotation, what are they learning, what do they want more of, maybe if they do a rotation that they're not crazy about, what do they want less of in their career. The goal is to place each one of these people into a permanent role. And if we've done our selection well, 95% of the time that happens. And I think the second part of the question was about what's the cost model to do it. So what we do is we treat our Career Start segment as corporate property. So we fund those positions to ensure that there's no, or there's limited debate around how much the field or how much the operation is going to fund them. Because ultimately, even though it's funded corporately, it has to come from the guys and gals building buildings. But the objective is to do it at the right level. That's why 24, at least right now for us, is about the right number. We do it in a way that we disperse them around the country. And as the business grows, we have not had any problems sustaining and placing those people at the end of their 24 months. So that process has worked really well. And along the way, what we do is we offer some developmental activities for those folks where we bring them all back to corporate. More and more, as the population grows now to around 100 people, we are doing things regionally or we're actually finding that we can activate their developmental and social within regions for folks. Thank you for the question. I think I have time for one more question. Patriots question? Thursday's game? No, please. For me, my role, or us, or the company? Yeah, so what I would say is that we're an organization that has probably from an industry perspective, we're probably not as progressive as some of the other industries that are represented in the room. And so very, very traditional kind of training methodologies and even the idea that I showed you about segmenting talent are things that have not been done in the past. And I've done a bit of research across the industry and I would say that they're not commonplace across the industry, right? So that's a generalization, but it's more or less true. So as far as where we want to go, for us what we believe is true is that as we grow our business at a rate that makes sense for us and as we diversify so that we can have good cash flow during any counter cyclical events that may happen, we believe that having talent ready to fill positions up and down the line, up and down that talent segment chart that I showed you, is a critical capability for us. So if you take that and you think about us getting really good at that, there are certain capabilities there that from an industry perspective we would love to be leaders in. We are definitely on a journey, we're not there. But I think what I would say in my year plus, we have sort of built, put the foundational building blocks down, right, not to use a bad construction analogy, and we're building up. So what success looks like for me are that we aren't scrambling, for example, to fill key leadership positions. So one of our leadership models as we go into a new market or new segment, because the culture that I talked about is so specific at Suffolk, we typically will make an external hire who's an expert and then we'll pair that person with an internal person who can really help with the acculturation, right? And that one-two combination of like a regional president and a chief operating officer who's been at Suffolk helps that external person with institutional knowledge so they sort of know the way we do things, but then helps us as a company because we immediately take a capability that we don't have and we insert it into the organization. So that's number one. I would say number two, with things like safety, and we are in the middle of a trend I call a transformation with safety. It's called Incident and Injury Free, where we are very focused not on the technical aspect of safety but actually, interesting enough, Trisha, the thing that you talked about, which is caring about people and being very, very open about saying that for the people that work for Suffolk, but more importantly the thousands of subcontractors that work with us, we care that you get to go home every night back to your families, that we don't want you to get hurt on the job. And we're talking about that openly. We're having discussions. And just last week we had our entire senior leadership team here in Boston out walking on about three different job sites. And all they did is they walked around, they talked with our subcontractors and employees about how do you feel, do you feel safe, do you feel like if something happened you could stop the job. And we just got a sense of that. We're doing that once a month to engage in that conversation to ensure that employees feel good about it. So that's a capability that we get good at. We would love to potentially offer that, I'd like to say maybe monetize it, but I don't know if we'd want to make a profit at it, offered industry-wide to say we are best in practice at this. And you could fill in the blank with things like leadership development. We aspire to do the same thing because what I believe is true is that when you are good enough at something that someone else wants it, and it's not gonna put you at a competitive advantage to do it, why not share? It's going to make the industry better. And if we make the industry better, that becomes a transformational opportunity. And then I think lastly, and I'll just say this in very, very simplistic terms, 'cause I'm a competitive guy, I want to win, right? Whatever winning is, that's what I want to do. And I think that goes part and parcel with the culture that we have at Suffolk and the fact that the passion of the guys and gals that build buildings is really second to none. And this last story I'll just tell you as I wrap up here is again back to the beginning. You know, I had this perception in my mind, probably like many of you do, about construction. My first time that I went out on job sites, and I was in San Francisco, in Florida, and Boston, walking around checking out these buildings. The one consistent thing that I learned is that the guys and gals on those jobs are extremely proud of those buildings. And you know, to quote what someone said to me when I was in San Francisco at a job site called 340 Fremont: I will look at this building for the rest of my life and know in the skyline when I look at it that I built it. And that's a pretty cool thing. So with that, everyone, I just want to thank you for the questions and your time, and I hope you have an enjoyable conference.