The benefits of diversification in a construction business

When Hunter Roberts decided to start an interior construction division in 2006, they went about it in a very strategic way, beginning by developing a strategic business plan. Diversification was the linchpin of the strategy. They knew that there are three main reasons to consider diversification of the business: * To protect against economic downturns in the marketplace * To offer extended services to the existing client base * To attract and retain talented staff. Forming the Right Team Hunter Roberts began by selecting the right executive team, covering an extensive background in all aspects of the construction industry: * Larry Petretti, president, had been an executive at Structure Tone for many years, and had led many of that firm's largest, most complex corporate, financial and law firm projects. He saw the opportunity to build a firm using his substantial expertise while striking out to create something new and vital. * Derek McGovern, executive vice president for project administration, grew up in a family ingrained in the construction business. After holding leadership positions in some of the top construction companies in the industry, both core and shell and interiors, he felt the timing was right for this new venture. * Dan Robertson, executive vice president of Technical Services, had spent 26 years in the construction business where he experienced the business from all sides having worked for a consultant, an owner and a contractor. With a background in electrical engineering, Robertson had an impressive background in building highly complex technical facilities, such as data centers and broadcast studios. * Fred Kelly, senior vice president, has been in the construction management industry for over 34 years, managing large, complex projects in the corporate, professional services, and broadcast/media sectors. These executives formed the leadership group of the new firm and they proceeded to build a highly sophisticated staff of professional builders, handpicked not only for their experience and expertise, but also for their expertise in diverse market sectors. Bob Fee and Jim McKenna (chairman and president of Hunter Roberts Construction Group) were fully supportive of our efforts and allowed us to run our own show. We saw it as a great opportunity, through our relationships, to build a different spin on a familiar service. Hedging our bets: We started Hunter Roberts Interiors in a bull market. We believed there was plenty of room in an $8 billion industry for another interior construction firm - particularly since we were beginning as a group of seasoned professionals with extensive experience and well-established relationships. We began by focusing on our core business - building office space for corporate, financial and professional service firms. In very short order, by building on our well-established relationships, clients were beginning to see us as an appealing alternative to the established firms. We started with 5 people and we're now at 50 people and growing. However, about a year ago, because of the growing subprime crisis, the executives were concerned about an impending economic downturn and began to implement their diversification strategy. They knew that their expertise was certainly relevant to other markets like the education sector, data centers, broadcast and media, government facilities, hospitality and retail. We were well prepared since this had been our strategy all along. Once again, they utilized their network of contacts in the real estate, development and consulting worlds to expand business development opportunities. Since those contacts are also finding themselves diversifying their practices, the synergistic efforts provided benefits to all. Diversity Works! As a result, in addition to initial projects for Fortune 500 firms such as AON, Bear Stearns, Reed Smith LLP, and MTV Networks, Hunter Roberts Interiors was awarded new projects that include the Surrey Hotel and interior fit out for Nielsen Media Research. The ability to offer a variety of experiences is a real benefit when trying to attract top talent, particularly in the management ranks. Recently, two exceptional professionals joined the firm's management ranks. Ron Agababian, a seasoned professional with over 30 years of experience in office space leasing and commercial brokerage, joined as director of business development. Kenneth Hill, brings over 30 years of experience to his position as director of operations where his responsibilities will include overall field operations. Diversity works in staffing as well.  Hunter Roberts' company-wide policy is to achieve a significant MBE/WBE participation on all projects. People are attracted to the firm because they're hearing about its young, energetic, entrepreneurial spirit and its great street credentials. Today, Hunter Roberts' staff consists of 39% women and minorities and they continually recruit to fill positions at every level So despite these unsettling times in the financial markets, the strategy is working and the future looks very bright indeed! Lawrence Petretti is the president of Hunter Roberts Interiors, New York, N.Y.